Equity release is designed to release some of the cash held in the value of your home so you can enjoy it during your retirement. It is typically sought by people over the age of 55 and is meant to be a lifetime commitment.
Equity release can be a complicated area and not all schemes are created equal. Also, while you may want to release some of the money, many people also want to leave some to pass on to family. The terms of this kind of arrangement need to be crystal clear before you sign on the dotted line. Saracens Solicitors are a mortgage solicitor in London who can help you to understand what you are getting into.
There are two types of equity release that offer different outcomes: lifetime mortgages and home reversion.
Lifetime mortgages
A lifetime mortgage is a loan secured against the eventual sale of your house after you pass away or move into permanent care. Most lifetime mortgages do not require you to make payments while you are alive and you will remain in your home for as long as you wish. The interest on your loan is added to the mortgage so the total amount repayable rises. If you decide to sell at any point, you may find the equity you eventually receive is substantially less than it was. Some mortgages allow you to pay the interest in order to leave significant equity in your home.
Just as with a regular mortgage, you can benefit from professional advice when choosing this kind of deal. When you choose Saracens Solicitor as your mortgage solicitor in London, we explore your options with you.
Home reversion
Home reversion is where you sell a portion of your home in order to receive a lump sum or income and live in your property rent free until you pass away or move into permanent care. Again, this can be a complicated business and you are strongly advised to take legal advice from a mortgage solicitor. In London, at Saracens Solicitors, we have experience tackling equity release plans of this type.
Home reversions are high risk products and may not be right for everyone. Once you have entered into this kind of deal, you cannot sell your house.
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