For many homeowners aged 55 or over, the question of financing the future often weighs heavily on their minds. Many homeowners of this generation have much of their wealth tied up in their homes, rather than in cash or other more liquid assets, as houses have grown greatly in price over the past few decades. Some will look up more about age partnership and equity release online and others will prefer to contact a financial advisor directly to talk through their options.
Equity release can be valuable in a number of situations, either for those who want a gradual injection of funding over a period of time, or for those who would value a lump-sum of money. Equity release is available to those aged 55 or over and there has been a recent rise in enquiries about the scheme.
There different types of scheme available. Some involve you taking on a new lifetime mortgage against your property and these tend to be the most popular type of scheme, so that you retain full ownership of your property without handing over any equity. The other option is to receive an income tax-free cash lump sum or look for a funding injection in return for a proportion of your home’s equity, which is defined as being the home’s value, less any mortgage you might have outstanding of it. It’s important to remember that if you do have a mortgage on your property, some of the capital that you release must be put towards repaying it. In situations like this, tax calculators and estimators can definitely be a big help.
The lifetime mortgage is the most popular type of equity release scheme and it allows you to own 100% of your home, without needing to make regular repayments. You can then use your equity release for any purpose you please. Many people want to carry out home improvements, gain financial piece of mind, clear their mortgage, mitigate inheritance tax, improve their lifestyle or help family members. There are plenty of other purposes to put your cash sum to; it depends entirely on your objectives and wishes – the money is yours once it has been released from your property.
The scheme can be used to ease into a more comfortable result, but it’s essential to seek qualified advice and find out whether this form of financing is right for you. Talk through your individual situation with a qualified advisor and find out the options available to you.