woman thinking about equity releaseMore and more retired people are using their home as cash machines as interest rates continue to fall on equity release loans. Rates have tumbled from around 8% four years ago to a fixed rate of below 3.50%. Money released through equity release is tax-free and you are able to spend the money on whatever you like (as long as it’s legal)!

So how do Equity Release mortgages work?

Equity release mortgages allow homeowners to take out the equity they have built up in their property.Lifetime Mortgages and Equity Release calculator

They are split into two main types-

Lifetime mortgage:

With a Lifetime mortgage you take out a mortgage secured on your property provided it is your main residence while retaining ownership.

Home reversion:

With Home reversion, you sell part or all of your house to a home reversion provider. In return, they pay you a lump sum or regular payments.

Most people chose a Lifetime mortgage.

How has the Equity Release market changed?

Equity release loans have over the years become more flexible. With hundreds of deals available from more providers, this has made the market very competitive. This has been good for you the consumers. Lenders have also come up with new more flexible products. Most Lifetime mortgages do not charge interest until the mortgage term expires. This is when you pass away or move out of your home into long-term care. Some providers now offer the option of paying the interest monthly.  This helps to reduce the amount of interest which is compounding and repayable at the end of the loan.

What can you spend the money on?

  • The reasons for releasing tax-free money in this way are many.
  • Some wish to help children and grandchildren get on to the housing ladder
  • Others to plug a gap in their retirement income
  • To pay off credit card debt or an outstanding mortgage.
  • Home Improvements such as stairlifts or wet rooms.

You can spend your money the way you want to.

Points to consider.

We feel that it is a good idea to involve your family in any financial decision which will reduce the value of the inheritance being left to them. From experience, we find that most families are supportive of your decision

Releasing equity from your property might affect your entitlement to means-tested state benefits.

These schemes can be complicated and expensive to unravel if you change your mind. They are seen as a long term agreement.

We only recommend plans with a ‘No Negative Equity’ guarantee. This means that you will never owe more than the value of your home.

We are a member of The Equity Release Council.

Above all, our adviser will always provide you with a personal illustration.

How Equity Release Northampton can help you?

Equity Release call back logoWe are a firm of Independent Financial Advisers (IFA’s). This means that the advice we offer is unbiased. We will look at all the financial options for you, not just equity release.

Your equity release adviser will search the “whole of market” to find the plan that is most suitable for you and your circumstances. We do not just recommend our own products or work from a limited panel like some.

Our advisers are all registered with “The Equity Release Council” and have taken the additional professional qualification need to provide advice on Equity Release.

Why not arrange a meeting today. Meetings can be held at your home, at one of our meeting rooms in Northampton or at our Kettering Head Office.

Finally, the meetings are free and without obligation. Our fee of £895.00 is only payable on completion. The fee is paid directly to us by your solicitor from the funds released.

These products are lifetime mortgages or home reversion plans. Equity released from your home will be secured against it.

Equity Release Council logo