Equity Release Exeter
To find out more about equity release in Exeter, take a look at our guide below or call our advisors today.
To speak to us, give us a call today.
How Does Equity Release Work?
Equity release allows homeowners, aged 55 and over, to take some of the value of their home as cash. The amount of cash you can release is based on your age, and also the value of your home. Depending on the type of package you opt for, you can usually choose whether to receive the money as either a lump sum, a series of lump sums or as a regular income.
The cash that is released is completely tax-free, and you can use it for whatever you like. It can be used for home improvements, travel or to pay off an existing loan. Whichever form of equity release you choose, you can continue to live in your home until the last surviving borrower passes away or moves into a care home. Before making any decisions, you must speak to a financial advisor for professional guidance. These products can only be taken out through a qualified equity release advisor.
What Are The Different Schemes?
You have two options to release equity from your property:
- Lifetime mortgage: With a lifetime mortgage, you borrow money against the value of your property. You will continue to own your home.
- Home reversion scheme: With a home reversion scheme, you will sell all or part of your property for less than the market value. You will then stay in your home as a tenant.
Both of these schemes allow you to take the money as a lump sum, a series of lump sums or as an income.
What Happens to My Lifetime Mortgage if I go into a Care Home?
- If the mortgage is in your name only: The house will be sold and the loan with interest is repaid. Any money left over can be used to pay for your care.
- If the mortgage is in joint names: You and your partner can live in the property until the last person dies or moves into a care home. Then the house is sold, and any money left after repaying the loan and interest, can be used for care costs.
What if I Sell My House, But Don’t Have Enough Money to Pay Care Home Fees?
For help with care home fees you can apply for local authority funding. Your local authority may pay all or part of the costs if your total income is below £23,250 (the figure is higher in Scotland and Wales). There is other funding available if you suffer from a serious medical condition or are disabled.
What if I Need Care in My Home?
You can use a lifetime mortgage to pay the costs of adapting your home. This can include installing alarms or a stairlift. In addition, if you need a full time carer, this mortgage can help pay these fees. Our advisors can address any concerns you may have.
How To Protect How Much You Can Pass On As Inheritance
Take Out Inheritance Protection
Inheritance protection is an option you can select for your lifetime mortgage to secure a proportion of the net sale proceeds of your property for the beneficiaries of your estate when you die. However, this will reduce the amount you can take as a loan. You will need to decide on the percentage you would like to protect (the protected percentage) when applying for a lifetime mortgage. This protection cannot be added to the mortgage, and you cannot increase the amount after the mortgage is completed.
Take Out Inheritance Protection
Inheritance protection is an option you can select for your lifetime mortgage to secure a proportion of the net sale proceeds of your property for the beneficiaries of your estate when you die. However, this will reduce the amount you can take as a loan. You will need to decide on the percentage you would like to protect (the protected percentage) when applying for a lifetime mortgage. This protection cannot be added to the mortgage, and you cannot increase the amount after the mortgage is completed.
Take Out Inheritance Protection
Different Ways to Repay a Lifetime Mortgage
On Death or Moving Out Of The Home
Unlike a residential mortgage, this product doesn’t have a set repayment date. You will not have to repay any of the money until you die or move permanently out of the home into care. If the mortgage is under joint names, nothing is repaid until the last person dies or moves into care. The loan is normally repaid when your home is sold.
Repayments During Your Lifetime
You can choose to repay some of the money you borrowed during your lifetime. Options include:
- Optional repayments: You can make partial repayments to manage the amount owed. Subject to terms and conditions.
- Monthly interest payments: You can pay some or all of the month interest to reduce the overall cost of the loan.
- Pay back the full loan and interest: It is possible to pay back the full amount, however you may have to pay an early repayment charge.
Take Out Inheritance Protection
What Are The Costs of a Lifetime Mortgage?
- Arrangement fees: An arrangement fee is often known as an application fee. These costs are not payable until your mortgage completes and the funds are released.
- Solicitors’ fees: You will need to appoint your own equity release specialist solicitor to act on your behalf. Fees are typically £650 but they can vary widely.
- Interest rates: These rates are fixed, meaning they won’t change over time. Any unpaid interest is added to the loan each month and is then charged on the loan, plus any interest already added. This is known as compound or roll up interest.