Release Equity From Your Home

How can older homeowners release some of the money tied up in their homes to use and enjoy in retirement?
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Andy Wilson Financial Services

Andy Wilson

Release Equity From Your Home

Why would you release equity from your home?

Many of those reaching pension age face the prospect of receiving lower than expected income from pension plans. We also have a state benefit system struggling to provide for those who need extra help to manage financially in retirement.

Others who retire may have something of an aspirational lifestyle, having been able to afford the nice things in life whilst they were working. This includes such things as foreign holidays, a new car every few years and other luxury goods.  There is still a natural desire to live comfortably, but often the savings and pension lump sums on retirement will only last for a few years.

Retirees also have a great deal of money tied up in properties. Whilst it is nice to think that some of this can be left to family and beneficiaries when they die, for many people this asset could be used to provide a better retirement.

So why might you want to release equity from your home?

The first thing is to decide the reason why you need it.

For some people, who may have retired on a low pension, the need may be to supplement income. There are plans available to provide ongoing monthly payments to help make life more comfortable.

However, for the larger amounts needed  there are lump sum release plans available. These can be used to improve the home, the most common use of equity release, or provide for more expensive purchases. Many of our clients buy cars, caravans or motorhomes to enjoy. Some will provide gifts to children or grandchildren for such things as house deposits.

For others, paying off an existing interest-only mortgage is a priority. They can refinance the mortgage, and pay nothing further until the house is sold. This can help the retired to stay in the home they love for ever.

Home Reversion plan features

One type of Equity Release is known as a Home Reversion Plan. These involve selling some or all of your home. In return, you are allowed to live there, rent free, for life.

However, the amount you are paid for the share sold is very low in relation to its true value. This is because the lender will have to wait  some time to be able to sell the house, and realise its investment. For this reason, this type of plan is far less used as the alternative Lifetime Mortgages.

We can advise and arrange lifetime mortgages and will refer to an approved specialist for home reversion schemes.

Lifetime mortgage plan features

All of these plans allow you to release equity from your home without the need to make monthly repayments. However, if you can afford it, options are available to pay the interest charged each month. This will keep the borrowing on an even keel.

The amount you can borrow on a lifetime mortgage depends on your age when the plan is arranged. This is because the lender assesses how long it might be before the loan is paid back. They do not want the debt to reach the property value, because they cannot then charge any more interest.

You can get an estimate of how much you could borrow by using our calculator.

Plans are available which allow regular withdrawals of smaller amounts on an ad-hoc basis. This involves setting up a ‘drawdown reserve’ which can be accessed at any time in the future as the need arises. These schemes are are becoming more popular and we are regularly seeing product innovation of this type from the plan providers.

You are also guaranteed never to lose your home, be repossessed or evicted. It will still be your own home, you will just have a mortgage on it.

Many schemes also offer the guarantees provided under the Equity Release Council’s Safe Home Income Plans standards. These ensure a safe, clear and understandable range of products from which recommendations can be made. Your security is paramount and the SHIP standards offer guarantees unavailable on any normal mortgage.

The process

Please take a look at our other Equity Release pages listed on the right hand side of this page.

Having decided to explore the possibilities, the next step is to meet with a competent and qualified adviser who specialises in the provision of equity release advice. Andy Wilson is a qualified and experienced specialist in this area. Andy is able to advise you on the most appropriate form of scheme for your individual requirements. An initial chat can be arranged  with no obligation to proceed further, and always at Andy’s expense, not yours.

Equity Release is not for everyone, even if they and their property meet the basic lending criteria. Andy will always tell you if it is unsuitable for you, and why.

Please use the ‘Contact Us’ form to ask for further information or to arrange a meeting.

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Equity release includes lifetime mortgages and home reversion schemes. We can advise and arrange lifetime mortgages and will refer to an approved specialist for home reversion schemes.

There may be a fee for lifetime mortgage advice. The precise amount will depend upon your circumstances but we estimate it will be £990.

Andy Wilson Financial Services Ltd is registered in England No. 07547809. Registered Office: Landmark House, 1 Riseholme Road, Lincoln, LN1 3SN. Andy Wilson Financial Services is a trading name of Andy Wilson Financial Services Ltd, an appointed representative of HL Partnership Limited which is authorised and regulated by the Financial Conduct Authority.

The guidance and /or information contained within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.

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I provide my consent for Andy Wilson Financial Services to contact me regarding my enquiry. We will use your name, email address and contact number (‘personal information’) to contact you about the services you have requested or respond to an enquiry you have submitted, which will require us to share your personal information with our advisers and supervisors. For further information on how your information is used, including disclosure to third parties, how we maintain security of your information and your rights in relation to the information we hold about you, please see our Privacy Policy.

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