Equity Release agreements are long term solutions designed to help certain homeowners release part or all of the equity in their home.
This can be achieved either by way of taking a one off lump sum, taking smaller lump sums periodically or by taking a monthly income for life.
Whilst rules vary from provider to provider, there are a few general guidelines which tend to apply throughout, such as – the homeowner:
1. Being over a certain age, typically 50 to 60;
2. Having a property worth a minimum of £ 30,000 to £ 50,000;
3. Looking to raise at least £ 10,000 to £ 30,000;
4. Being ideally mortgage free, although a small mortgage could be repaid from the equity released;
5. Owns a property of standard construction which is either freehold or subject to a long lease;
6. Owns a property which is in a good state of repair, although the equity released can be used to fund any essential repairs required by the equity release provider;
7. Must not have tenants or any other people living at the property who would have rights under The Rents Act.
Equity released from home can be used for many purposes. It might be that you would like to carry out some home improvements, take that holiday of a lifetime or simply unlock some of your money tied up in bricks and mortar to afford you a better quality of living.
Whatever your reason for thinking about equity release it is something that should be considered carefully and it is advisable to talk to an experienced whole of market advisor who can guide you through your choices.