The most popular type of capital release is a lifetime mortgage. This is a loan based on the value of your home, which you can take as a lump sum or in smaller amounts in a downsizing facility, when you need it. A capital release mortgage involves a lender giving you cash in exchange for a portion of the proceeds from the sale of your property later. But unlike a traditional mortgage, which you pay within a certain period of time, a capital release loan is not settled until you leave your home.
A lifetime mortgage is the most common type of capital release. As with a traditional mortgage, a life equity release mortgage is a loan against the value of the property. The most popular type of capital release plan is called a life mortgage. Some other developed countries (U.S.
US, Canada, Australia, New Zealand and South Africa) also have them, but they refer to them as “reverse mortgages”. Most people who get a capital release use a life mortgage. This is the most popular type of capital release. You borrow a lump sum in the form of a mortgage, which is eventually paid by the sale of your home, whether you die or move into long-term care.
The amount you can borrow is usually between 18 and 50 percent of the total value of the property; in general, the older your age, the more you can free. The most popular form of equity release is to apply for a loan based on the value of your home (as long as it is your primary residence). This can be a very popular way to keep your loan balance under control, while allowing you flexibility on how much to pay and how often. Because interest is only charged on the money you actually release, a reduced lifetime mortgage may make sense for homeowners who want to supplement pension income or pay regular bills, such as paying care.
If the value of your home has increased since you first bought it, you may see releasing equity as a useful way to unlock that money without having to sell it. The release of capital may not be right for you in your circumstances, so it will always be necessary for us to advise you well. The lifetime mortgage plan allows you to release some of the cash tied up on the property and at the same time allows you to live there until you die or move to a nursing home. People often say that “my house is my pension, and many use Capital Release for that; to supplement income during retirement.
Continue reading below for more tips and advice to avoid any possible horror stories about releasing capital. Choose the Right Way to Release Equity for You and Your Family Whether a Lifetime Mortgage or Housing Reversal Plan is in your best interest will depend on a wide range of circumstances, such as how much you expect to leave your family as an inheritance. To obtain a capital release plan, you will need a consultation with a qualified capital release advisor; they will be able to recommend the most suitable plan for you. Equity release allows you to access cash held at home if you are 55 or older, without having to sell it.
Charges will vary from provider to provider and between advisors, but the total cost of setting up capital release can reach £3,000. If you think capital release might be right for you, you should consider all your options and talk to a capital release advisor. Both allow landlords 55 and older to free up cash from their properties, and both allow landlords to stay in their homes until they die or enter long-term care. Responsible Equity Release can offer you a free, no-obligation consultation with one of their fully qualified advisors.
They are members of the Equity Release Council and its founder, Simon Chalk, is on the advisory board of SOLLA (Society of Later Life Advisers). .