Am I eligible for equity release?
EQUITY release is a way for homeowners to access the equity that has built up in their homes as tax-free cash.
People who are at or approaching retirement who find themselves asset rich, but short on readily accessible funds, might consider it. But are you eligible for equity release?
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The eligibility criteria for equity release can vary depending on the provider and the specific product, which an advisor can take you through in more detail.
However, there are standards which are required from most providers.
Firstly, you must own the home you wish to release equity from, and it must be worth at least £70,000.
The property must also be your main residence and be based in the UK.
Not all property types qualify, but generally it must be in a good state of repair and be of standard construction.
Some non-standard constructions such as thatched roofs may require additional conditions.
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Age is another factor, and the youngest homeowner on the deeds must be at least 55 years old.
There are two types of equity release, a lifetime mortgage and a home reversion plan.
With a home reversion plan, you must be at least 65 years old.
Different providers may have additional specific criteria or conditions.
For example, some may have restrictions based on the location of the property or may not offer equity release on certain types of homes (like flats in high-rise buildings).
A conversation with an equity release advisor can help you find out if your property might be suitable.
How much could I access?
Conditions such as the age of the youngest homeowner and your property value affect how much you may be able to release.
This is currently anywhere between £10,000 up to 53% of your home’s value. Generally the older the youngest homeowner, the more you may be able to release.
How much you could release also depends on other factors such as what you plan to use the money for, as it’s not advisable to release too much and end up paying unnecessary interest on the loan.
How you can enjoy spending the money is quite varied, however, whether that’s on a holiday, home renovations, helping loved ones or supplementing your retirement finances.
It does however require paying off any existing mortgage first.
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Is equity release a good idea for you?
Equity release is a long-term financial commitment so it’s important to get the right advice.
Advice is required before proceeding with equity release and a specialist advisor, such as those at Age Partnership, can talk you through the different options to help you find out if it could be right for your individual needs, or if another option could be better.
Equity release may involve a home reversion plan or a lifetime mortgage, which is secured against your property and reduces the value of your estate and impacts funding long-term care.
Any money you release, plus accrued interest, is repaid when you die or move into long-term care.
Initial advice is provided for free and without obligation.
Only if your case is completed would an advice fee of £1,895 be payable. Other lender and solicitor fees may apply.
Age Partnership is a trading name of Age Partnership Limited, which is authorised and regulated by the Financial Conduct Authority. FCA registered number 425432. Company registered in England and Wales No. 5265969. VAT registration number 162 9355 92. Registered address, 2200 Century Way, Thorpe Park, Leeds, LS15 8ZB.