Best Financial Advisors in Kidlington

Equity release is the process of transforming the equity that you hold in your home into cash which you can spend. Traditionally, the easiest way to achieve this was by downsizing to a smaller property. However, with equity release products, like a Lifetime Mortgage, you can release equity as a tax-free cash lump sum by borrowing against the value of your home and remain living there.

If you already have a mortgage secured against your home, you can still be eligible for equity release. As long as you can clear your existing mortgage on completion of your Lifetime Mortgage, then you will be eligible. Many people choose to use the release itself to clear the outstanding mortgage amount, but you can also use other funds, if you have any available to do so. In fact, clearing an existing mortgage is one of the most popular reasons for people who are considering releasing equity from their home.

With a Lifetime Mortgage, you do not need to make any payments towards what you owe unless you choose to do so. Rather than requiring monthly payments, the interest is added to what you owe and builds up over time. There are plans available that allow you to make voluntary payments, typically of up to 10% of the original amount borrowed per year without penalty. This can help you to reduce the impact of your Lifetime Mortgage on your estate.

The Equity Release Council is a voluntary membership body that ensures best practice in the equity release industry. It ensures that consumers are protected by a code of conduct which seeks to offer security. All Lifetime Mortgages that Responsible Equity Release advise on will come from a lender approved by the Equity Release Council. As such, you will benefit from the following safeguards: A no-negative-equity guarantee, meaning that you will never owe more than the value of your home. The option to fix the interest rate on your Lifetime Mortgage for life. The guaranteed right to remain in your home for life or until you enter permanent long-term care.

When releasing equity you can still leave an inheritance for your loved ones, as current interest rates mean it is highly unlikely that you will ever owe more than the value of your home. If you are concerned, some products will have the option to ring-fence a portion of your home's value as a guaranteed inheritance. This means that even on repayment, the lender won't be able to touch this guaranteed amount. Ring-fencing an inheritance might however reduce the amount of equity the lender will be able to offer you from your initial release. For some, they use the equity that they release from their home to advance an inheritance to their loved ones early, and see it used within their lifetime.