Q: How old do I have to be to take out equity release?
A: 55 years of age or more. For certain types of home reversion plan you may have to be 65 and over. If you are one half of a couple, it is the age of the youngest half that counts towards this requirement.
Q: Can I have a mortgage and an equity release at the same time?
With an equity release plan, you can't have a mortgage or any other loan secured on the property at the same time. Many people take out an equity release plan in order to clear any existing mortgage from their property - and with it the stress that comes with having to make those monthly mortgage payments.
Q: Do I have to make monthly repayments if I take out equity release?
A: No, quite the opposite. Unlike a traditional mortgage, an equity release plan is designed to offer you a secure and steady income throughout retirement. You do not have to make any monthly repayments for the lifetime of the equity release plan. The plan does not have to be repaid until the house is sold when the last person on the plan passes on or moves out of the home and into long-term care.
Q: Can Equity Release be used as part of my inheritance tax planning?
A: Yes. With the introduction of transferrable Nil Rate Band allowances, a married couple may now be able to pass on assets up to £650,000 without any liability to Inheritance Tax. However, for a single person, or where the Nil Rate band of a deceased spouse has already been used in other planning, the Nil Rate Band allowance remains at £325,000.
If you have a property worth more than your Nil Rate Band allowance, you may be interested in finding out how Equity Release could work for you.
It may be that Equity Release is not suitable for you. In such cases, it may be that a review of your personal financial circumstances could provide you with the extra income that you need.
Equity release is an agreement between a homeowner (55+) and a provider that allows the homeowner to unlock the money tied up in their home. This money is tax-free and helps the homeowner to enjoy the retirement that they have worked hard for.
If you take out equity release you are still able to carry on living in your home for as long as you like. For most people, their home is their greatest asset. Equity release schemes can turn this asset into extra cash. You should always seek the guidance of an equity release adviser and a solicitor.
