Cornwall LivingIssue #74
How can your home help
Have you ever stopped to think about Equity Release but been unsure what it entails? Equity Release experts, Harris Begley Financial Planning, help to dispel the myths.
When you’re thinking about planning for your retirement, it’s important to take a look at the whole of your finances, not just your pension, to see if you’re on course for the kind of retirement you’d want for yourself. Equity Release was regulated in 2007 and has come a long way in ten years, helping people who are asset-rich to have the freedom to make lifestyle choices they may not have been able to afford otherwise.
“Even if you have an outstanding standard mortgage you can still release equity as long as the funds…”
Designed for people aged 55 and above, Lifetime Mortgages (the name for Equity Release plans regulated by the government) allow you to release capital from your home whilst still maintaining ownership.
A Lifetime Mortgage comes with a ‘No Negative Equity Guarantee’ that means you will never owe more than the value of your home. Only when your property is no longer your main residence is it sold, at which point the proceeds of the sale are used to pay off the loan and any accrued interest. Any remaining proceeds are then paid to you or your heirs. Should there be a deficit between the sale price and the loan amount then any remaining balance is written off.
Even if you have an outstanding standard mortgage you can still release equity as long as the funds, and/or your savings, can pay of your existing mortgage. You can also choose not make monthly payments on a Lifetime Mortgage, so increasing your financial freedom. The interest you choose not to pay is simply added to the total you owe and paid when the property is sold. You should bear in mind that a lifetime mortgage is just that, a lifetime commitment and the costs involved, plus the amount you release, will reduce the inheritance you leave. However it may be possible to guarantee that a share of the proceeds from the eventual sale of the property will always be paid to you or your estate. If you would like to find out how your home could help you in your retirement then it makes sense to talk to a specialist who can help you make the right decision for your future.
"Even if you have an outstanding standard mortgage you can still release equity as long as the funds..."