However, if you're a homeowner in more pressing need, it's worth speaking to a mortgage broker about the possibility of remortgaging, or even contacting a financial adviser if your situation is particularly complicated. However, there are a number of potential pitfalls and issues to be aware of if you are thinking of taking out an equity release … Some equity release lenders place high early repayment fees on their products to discourage equity release borrowers from using the equity release product as a short term lending facility. Negative equity Ever so often the interest charged on the equity release ould have surpassed the total value of the property and the equity release borrower will find themselves owing significantly more than their properties are worth. Though their home in an upmarket part of north London was, even then, worth a fair bit, the equity release company gave them about £52,000 for a 90% share. Lifetime lease Equity release plans run until the money is repaid, or until the last borrower moves into permanent long-term care or dies. I would avoid equity release if you can,not many horror stories out there. Discover all times top stories about Equity Release on Medium. In fact, it’s a regulatory requirement. June and her now deceased husband had entered into an equity release contract in 1994, after they had fallen on tough financial times. Equity release allows individuals aged 55 and over to release money from the property they live in without having to make any monthly repayments. Andrew Castle, 51, branded equity release schemes 'not human,' after his wife's elderly parents were left owing £46,000 when they took out a £70,000 loan against their home in Dorset. This can either be received as a regular income or as a lump sum, both of which are tax-free. The most common form of equity release is called a ‘lifetime mortgage’ – which is a loan secured against your house. But home reversion plans, the other type, won't be. There are two types; so-called “lifetime mortgages” where you take out a loan, but don’t pay any interest on it. If you are over the age of 55 and a homeowner, you are probably eligible to take out an equity release plan. Huuti does not provide any financial advice or services other than those listed in our Terms of Business. Based on our research, the content contained in this article is accurate as of the most recent time of writing. When June died at the age of 98 a few weeks ago, it was a painful time for her bereaved daughter, Rosemary. To help guide you through the various options, we have provided equity release reviews on market leading providers across the UK, so you can understand more about what’s available to … Then add into the mix that Rosemary is herself now in her mid-60s, and suffers from chronic fatigue syndrome. Membership at Equity Release Council. The firm offered her £90,000 for a house worth £145,000 with a monthly rental payment of £550. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. Equity release is a long lasting and complex product, but isn’t automatically a bad idea. What do mortgage lenders look for on tax returns? Huuti cannot guarantee you will be offered any product, or the terms that may apply. Always act in the best interests of the client, treating them fairly in all actions. At this point she called us. Enabling you to make longed In this case, individuals can take out a mortgage secured on the property while still retaining ownership of the home. into, cancelling or switching any financial product. Equity release is a way for older homeowners to access some of the money (the equity) that is within the value of their home. Please refer to our Terms of Business. Learn More. 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