Equity release is a generic term referring to a range of products which allows clients aged 55 and over to access the equity in their property without having to move home. The money released can be a one-off lump sum, a number of smaller amounts or a combination of the two.
There are two equity release plans and both are regulated by the Financial Conduct Authority (FCA).
A loan is granted secured on the property which is usually your main residence. The majority of lifetime mortgages permit the interest which is being charged to be “rolled up” and so added to the loan which will increase the debt. The loan amount and any accrued interest is paid back when the property is sold, usually upon death or when the borrower moves into long-term care. Where a property is owned jointly the arrangement will remain in place until the death of the second borrower or until the second borrower goes into long-term care. Click here for further information about lifetime mortgages.
A home reversion is the sale of all or part of your home to a home reversion company in return for a lump sum or regular payments. As with the lifetime mortgage customers can continue to live in their property, rent free, until they die or until they leave the property to go into care. Click here to find out more about home reversions.
If you wish to arrange either a lifetime mortgage or a home reversion you must take advice from a financial adviser who has passed an appropriate examination and who holds a specialist qualification. In addition, it makes sense to use an adviser who is a member of the Equity Release Council, a trade body representing those involved in the equity release market. Members have agreed to abide by a set of rules and standards which go beyond the basic regulatory requirements.
Michael Forward Financial Services Ltd is a member of the Equity Release Council and is authorised and regulated by the Financial Conduct Authority. FCA No: 630157
Equity release may involve a lifetime mortgage or a home reversion plan.
To understand the features and risks, obtain a personalised illustration from a professionally qualified adviser. A lifetime mortgage is a loan secured on your property.
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