We talked to Tony Nottage from The Mortgage Place to answer all your questions about Equity Release
What is Equity Release?
Equity release is essentially a mortgage where there is no end date that the loan will have to be repaid by, the only conditions that the loan will have to be repaid are on certain events (typically death or entering full time care). Unlike a traditional mortgage you have the option to not make any payments and to roll the interest up so it will be paid on one of the previous mentioned events.
Is my home ever at risk?
Your home won’t be at risk as you don’t have to make any payments if you chose to not make any payments, then the provider will simply roll the interest up in to the loan and it will be paid at the end of the loan or on sale of the property.
I still want my home to leave some inheritance for my family, is this possible?
This is possible, you will find that most lenders will offer an inheritance guarantee, it may limit the amount you can borrow however you can secure something for your loved ones.
How much can I release from home?
The amount you can release from you home is very dependant on your age, typically the older you are the more that you can raise (worth calling and having a chat!)
Will I pay any tax on the money released?
No, currently the money that you raise is tax free, this is obviously subject to UK tax law however currently there would be no tax due on the borrowing.
Can I release equity on a buy-to-let, holiday home or second home?
You can raise an equity release mortgage on a buy-to-let property, you will find that typically the interest rates are higher, however this is possible. It is also possible to raise an equity release product on a second property or holiday if that is preferred.
What happens if I want to move house under this scheme?
Most equity release mortgages are ‘portable’ meaning that you can pick them up and take them with you to the new property, this is subject to application, however most of the time this isn’t an issue (as long as the property you are moving to is suitable for the lender).
What happens when I die or move into long term care?
If you pass away or move in to long term care the loan will become repayable at this point unless your partner is still living in the property, then the loan will only become repayable upon their move to long term care or their demise.
What are the associated fees for this?
The fees for these sorts of arrangements are very dependant on the deal that you chose, typically you will have solicitor costs for some legal work, there may be a valuation fee, however most lender will give a free valuation and there may be a lender fee however not on every deal, from our side of things, unlike a lot of other equity release brokers, we don’t charge a penny!
The Mortgage Place Ltd is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales. Registered Office: 73, Liederbach Drive, Verwood, Dorset, BH31 6GG. Calls may be recorded for training and monitoring. We typically do not charge a fee for mortgage advice, but commission will be received from the lender. Equity released from your home will be secured against it.
t. 01202 497500
a. 4 Restynge House, 11-13 Ringwood Road, Verwood, Dorset, BH31 7AA