IS EQUITY RELEASE SAFE?

Plans from Equity Release Council members provide important legal safeguards.

Please see here for more information.

MIGHT THERE BE A DEBT FOR MY CHILDREN TO REPAY?

All Equity Release plans from Equity Release Council members have a ‘no negative equity guarantee’ which means the value of the plan cannot exceed the value of your property.

ARE THERE ANY MONTHLY PAYMENTS?

This is up to you as there are various choices. If you need or prefer to have no monthly payments, there are numerous plans available to you. If you prefer to make payments there are options for you to consider including:

1. Interest only payments
2. Part interest payments – you can select how much to pay from the outset; any part of the interest you do not pay will roll up.
3. You can make occasional payments without the commitment of a monthly direct debit.

The plans that are available vary from time to time so it makes sense to contact us to see what options are available. Only a lifetime mortgage would have these facilities as there are usually no monthly repayments with a home reversion plan.

HOW MUCH CAN I RELEASE?

The amount depends upon the age of the youngest applicant and varies between different providers and the type of plan. Please see the calculator on our website for an indication. For example a 60 year old may release up to 25% of the value of their property from a Lifetime Mortgage. That amount would be up to 30% at age 65, 45% at age 70 and 50% at age 75. Sometimes a higher amount is available subject to a short medical & lifestyle questionnaire; clients with medical problems can sometimes release more money. Please call us to discuss how much is available for you.

WHAT IS A DRAWDOWN PLAN?

A drawdown plan is a type of Lifetime Mortgage that provides a cash reserve enabling you to release what you need as and when you need it. The big advantages are:

• interest is only charged when you release money
• you don’t need to see and adviser or a solicitor or have your house valued again
• the additional drawdowns are available quickly

HOW LONG DOES AN EQUITY RELEASE APPLICATION TAKE?

From the time of applying for your Equity Release until you receive your funds typically takes around six weeks.

WILL EQUITY RELEASE AFFECT MY STATE BENEFITS?

Equity Release can affect means tested benefits such as Pension Credit and Council Tax Credit. This doesn’t mean you shouldn’t take an Equity Release plan but it is important to understand the impact it may have. We can help you in this respect and it is often possible to take sensible measures to avoid losing any of your benefits. Your state pension is not affected.

ARE THERE ANY MEDICAL QUESTIONS?

Usually not. There are, however, some circumstances where someone with medical conditions can release more money from their Equity Release.

CAN I REPAY AN EQUITY RELEASE PLAN?

With a Lifetime Mortgage, yes you can. It is important to discuss this when seeking advice because it has different implications from plan to plan. Most plans have some form of early repayment charge. Some plans have a fixed early repayment charge; with others it can be more complex as the charge is based upon long term interest rates. We discuss this with all clients as part of our advice process.

CAN I MOVE HOUSE AFTER TAKING EQUITY RELEASE?

Yes, this is one of the guarantees provided by members of the Equity Release Council providing your new property is suitable security for an Equity Release plan. However, this will be subject to the maximum amounts available at the time you want to move. It is important to discuss this with your adviser if you intend to move house in the future.

CAN EQUITY RELEASE BE ARRANGED ON A BUY TO LET PROPERTY?

Most Equity Release plans are designed for owner occupiers so a rented property would not qualify. However, there is sometimes a lifetime mortgage available for Buy to Let landlords and for owners of second homes. Please see our buy to let page for more information.

IS SIXTY PLUS A MEMBER OF SHIP?

SHIP has relaunched as the Equity Release Council and we are proud to be a member. As independent advisers we can advise on all Equity Release options and will always recommend a plan from an Equity Release Council member or a plan with equivalent legal guarantees.

Legal Questions

MY SON OR DAUGHTER LIVES WITH ME. CAN I STILL TAKE EQUITY RELEASE?

Yes. Your son or daughter may be asked to sign a waiver acknowledging that they do not have the right to remain in the property after you have died or moved in to long term care as the Equity Release plan will end at that time. The same applies to any other relative or lodger.

CAN I CHOOSE MY OWN SOLICITOR?

Yes, you are free to choose whoever you like or we can introduce you to one if you wish. Just as we are financial advisers who specialise in Equity Release, there are solicitors who specialise in this area. It is important to check with your solicitor that they have Equity Release experience to avoid delays.

CAN EQUITY RELEASE BE ARRANGED UNDER A POWER OF ATTORNEY?

Yes, most Equity Release plans are available under a Power of Attorney. Take care as it is often necessary to have two Attorneys. Please get in touch if you have any questions on this. We are happy to work with your solicitor to ensure things go smoothly.

If you have any other questions you would like to see answered on this page, please contact us.