Is Equity Release Safe?Yes - With SHIP (Safe Home Income Plan) approved equity release schemes there are important legal guarantees in place. Does SeekER offer advice?No. Seeker is neither a financial services company nor an independent financial adviser and, as such, are unable to offer personalised financial advice. SeekER is an information only website and any answers provided here are only intended as general guidance of what is normally the case under regulated equity release schemes. You should not depend on any of the answers on this site and should only proceed further after taking the advice of one of our impartial equity release advisers. Find an adviser near you. Will I loose my home with an equity release plan?No. With safe SHIP approved and FSA regulated equity release schemes you will always retain the right to live in your home until your pass away or need to go into care. If you are applying jointly, this will always be until the last applicant dies or needs to go into care. Therefore, you can rest assured that any spouse you leave will never be turned out. With a Home Reversion Plan your beneficiaries will not be able to inherit the home, as you are selling the rights of the home to the reversion company, but you will still retain the right to live in it rent free for the rest of your life(s). With Lifetime Mortgages you are not selling ownership and when the last remaining applicant passes away or is taken into care, all that the company will want back is the amount owed including rolled up interest. Whilst this figure would normally be raised by selling the home, if your estate had the money and someone in particular wanted your property, your executors could simple pay back the debt and keep the property. Could my family be left with a debt after I die if the value of my property were to fall?Absolutely not, all SHIP (Safe Home Income Plans) approved equity release schemes carry a 'no negative equity guarantee' which means that in the event of any debt on death or move into care, being greater than the amount your executors or family can sell the property for, the company loses out not you or your family. With equity release can I guarantee some money for my children?Yes you can. You can either sell just a percentage of your homes ownership under a Home Reversion Plan thereby keeping the remaining percentage for your family to inherit or for you to sell at a later date if required, or some Lifetime Mortgages allow you to guarantee that a certain percentage of your homes value will remain but this does reduce the amount which would be available for you now. How much equity can I release?The amount depends on age and varies between different providers. To find out how much contact a local Independent Equity Release adviser by searching our equity release directory. How long does an equity release application take?
From the time of submitting an equity release application to receiving your funds usually takes approximately 8 weeks. Will equity release affect my state benefits?
Yes Equity Release can either affect any means tested benefits such as Pension Credit, Savings Credit and Council Tax Credit you may be receiving or funds released could prevent you claiming when otherwise you may have been entitled to benefits. This doesn’t mean you can’t take an Equity Release plan but it means it is important to understand the impact it may have. Your financial adviser may be able to help you assess this but you should also contact your benefits Agency and Local Authority to see what implications if any, releasing equity would have. Can I move to a suitable alternative property in the future if I want to, without financial penalty?
Yes, providing you want to buy another suitable property (generally meaning a traditionally built house, bungalow or flat situated in England, Scotland or Wales, which is freehold or lease with more than 80 years remaining and is worth typically more than £100,000 although you should check individual plans criteria), you can ask for the plan to be transferred onto your new property. There will of course be associated moving costs involved, and depending on the outstanding debt on your existing property, and the amount you would be able to borrow on your new property, if you decide to down value, you may need to repay some money to also downsize the equity release loan to keep the debt in proportion to the new property value. Can I repay an equity release plan, for example if I want to sell up and downsize?
Yes you can. This is an important matter to discuss when seeking advice because it has different implications from plan to plan. Most equity release plans have some form of early repayment charge if you want to pay the loan back early through any other reason than death of the last borrower. However there is currently one provider who offers a scheme which has no Early Repayment Charges. Should I discuss my intention to release equity with my children?
Yes and all our registered advisers would recommend you do, to avoid any nasty surprises, but there is no compulsion on you to discuss releasing equity if you do not want to. These are some of the more common questions from people who are thinking about releasing equity. Before proceeding with any equity release plan you must seek advice from an independent financial adviser and a legal adviser who will answer all your questions and explain the positives and negatives of releasing equity from your home. “Equity release” includes home reversions plans and lifetime mortgages. To understand the features and risks ask for a personalised illustration. |