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Equity Release Options

There are two main types of Equity Release: Lifetime Mortgage and Home Reversion

Lifetime Mortgage-the more commonly used method of accessing the value of your home. This involves securing a mortgage against your home which you can choose to pay towards by either monthly or ad-hoc payments, or make no payment towards it, allowing the interest to roll-up and be added to the loan.

This could be a one off lump-sum arrangement or could include a Drawdown Facility. This allows further borrowing in the future, up to a pre-agreed maximum limit, without the need to re-apply. The interest rate of the initial loan won’t be affected by further drawdowns, but the rate charged on any subsequent drawdowns will be at the prevailing rate at the time of release.

An Income Lifetime Mortgage provides a monthly income for a set period of time-usually between 10-25 years. The amount is set from the outset and cannot be altered during the term of the arrangement. At the end of the term, the monthly income stops, but interest will continue to be added to the balance until repayment.

The monthly income can be stopped at any time, but it may not be possible to start it again, and the monthly amount cannot be increased or decreased. This option does not allow further lump sum drawdowns.

Home Reversion-this option involves selling a part share or all of your property to a reversion company in return for a single lump sum. You retain a lifetime tenancy to remain in your home and may be charged a nominal annual rent. Home Reversion may not permit further drawdown of funds, and may restrict your options should you wish to move home in the future. Typically, the maximum lump sum could be between 30-60% of your home’s value.

For clear, concise equity release advice, please call me: Michael Hodgetts on 01473 730999 The initial consultation is always free, but any subsequent advice could be subject to a fee, agreed in advance with you.

Contact us now for clear concise equity release advice

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Lighthouse Platinum Wealth Management

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Tel. 01473 730999

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