Equity release gives homeowners over 55 the opportunity to access cash from their property without having to move.
In this article, Equity release advisor John Lawson explains what equity release is, takes a look at Age Partnership mortgages, and answers the question of how popular is equity release in London?
What’s Equity Release?
An equity release mortgage is a percentage of the money you take out against the value of your home or property.
Unlike remortgaging, equity release does not require monthly instalments to be paid back.
Individuals need to be 55 to apply for equity release and 65 to apply for joint equity.
It is cash that you can free up for the use of educational payments, purchasing another property or something unique.
How Does Equity Release Work?
Equity release works by having a broker evaluate your home to determine the property value.
Once the value has been determined, the broker will help you approach lenders closest to your interests.
There are2 types of equity releases which you can choose from:
- Lifetime mortgage
- Home reversion plan
A lifetime mortgage allows the homeowner to live in the house until death or they are moved into a care facility. The beneficiaries can decide to repay the money with any financial means and keep the home.
Home reversion is when the homeowner sells a percentage of the home to a lender who will then claim the money back when the homeowner dies.
The beneficiaries will then inherit whatever portion is left after the sale when taking a home reversion mortgage.
Once you have spoken to a broker, you can check your credit score and see if you qualify for equity release.
The broker will help you find a lender with the best interest rates and the highest release value for your property.
It is also good to note that a solicitor needs to be present when making decisions about the broker you choose.
The lender can pay for a solicitor or offer to recommend a solicitor they use.
Is Equity Release Popular in London?
Financial advisers have seen up to 80% more growth in the number of people who have taken out equity releases in London.
The cost of housing in London has been on the rise since 2018.
By 2021, 70 per cent of homeowners had applied for equity release to help them get through the Covid-19 lockdowns.
Equity release has made it easier for people to pay off old debt and invest their money in other projects.
Why Should You Release Equity
You should release equity to help make life easier when you have retired.
The money could be helpful if you have children or grandchildren who are still in school.
You may have wanted to renovate your home to make it easier to live in after retirement, or you might have wanted a beautifully landscaped garden to enjoy.
Equity release can also help you pay off your debt, making your retirement worry-free.
There are specific ways that you need to spend the money either. The choice is yours.
Is Equity Release a Good Idea?
Equity release is a good idea for older people looking for extra cash in retirement.
You can use the money to purchase special items or go on a holiday.
Many retirees opt to have the money paid in monthly instalments to ease them into retirement.
There is no specific way to spend your money, but paying for education, investing in property, or a small business is some of the highest-ranking spending.
Equity release can pay for home improvements, medical care, or help a family member struggling financially.
Companies like Age Partnership assist people with their equity release and retirement decisions.
They are a great source of information regarding applications and making the right choices with equity release and investments.
Who’s Age Partnership?
Age partnership is an award-winning company specialising in retirement packages for seniors 55 and older.
They specialise in pensions, insurance, equity release and mortgages.
The company is regulated by the Financial Conduct Authority and is a member of the Equity Release Council, an industry trade group.
Age Partnership’s Equity Release Plans
Age partnership offers both drawdown and lump sum equity release plans, which include the following options:
Age Partnership Gold
The Age Partnership Gold Lump Sum offers interest rates from 3.43% and free application and valuation.
Age Partnership Lite
The Age Partnership Lite would be the best plan to choose for larger cash payouts.
The interest rate starts at 2.98%, and the maximum LTV is 35%.
Age Partnership Platinum
The platinum partnership offers free valuation and fixed interest rates from 4.67% with the Age Partnership Platinum Drawdown.
Age Partnership Superlite
The Age Partnership Superlite Drawdown allows you to choose from several drawdown plans with rates as low as 2.74%.
The loan is free of charge, there is no completion fee, and the LTV is capped at 32%.
Age Partnership equity release plans include a cashback option.
In Conclusion
London has the most expensive real-estate value in the UK.
With the impact of Covid-19 being so vast, more people are turning to equity release to ease the tight grip on the finances.
The benefits are profound, and homeowners can see their beneficiaries settled financially over time thanks to an equity release plan that can protect their future.
