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There are two categories of equity release plans, both of which our specialists at Bower Retirement Services are fully qualified to advise you on. These are a Lifetime mortgage and a Home reversion.
The most suitable plan for you will depend on a number of deciding factors:
The best way to discover which type of plan is best for your individual needs and circumstances is by arranging a free, no-obligation consultation in the comfort of your own home with one of our expert advisers. Call free phone 0800 411 8668 today.
Where the provider lends a percentage of your property’s value. You are charged interest on the loan but unlike an ordinary mortgage, you do not need to make any monthly repayments (although this is an option if you wish to) and there is no set term. There are a number of flexible options available with this type of plan which you can learn about here.
A lifetime mortgage enables you to unlock tax-free cash from your property without the need to make any monthly repayments. The provider lends a percentage of your property’s value and you are charged interest on the loan. Whether you repay all, some of none of the interest over the life of your plan is decided by you when you take out your plan.
With all lifetime mortgages, the loan plus interest continues until the plan comes to an end, usually when you pass away or move into long-term care. At this point the property is sold to repay the original sum borrowed plus any interest that has accrued.
If you select a lifetime mortgage then there are a number of flexible plans available that can be tailored to your individual needs and circumstances – your specialist adviser will be able to discuss all of these with you during your free, no-obligation consultation.
Where you sell your home or a percentage of it in exchange for a discounted lump sum or monthly income, or a combination of both. You can stay in the property for life or until you wish to sell it, at which point the provider will reclaim that percentage of the sale price. Because you are selling all or part of your home, there is no build-up of interest.
Home reversion plans also enable you to unlock cash from your home without the need for any monthly repayments, but they do work differently to Lifetime Mortgages. With this type of plan you sell your home or a percentage of it to the reversion company, in exchange for a lump sum or monthly income (or a combination of both).
It is important to note that the ownership of the property reverts to the reversion company and you will not get the full market value for your house. This is because the reversion company is effectively granting you the right to remain in property for the rest of your life ‘rent-free’.
So how does it work?
If you sold half of your property to the reversion company, when the plan comes to an end (usually when you pass away or move into long-term care) then the money raised from the resulting sale of your home would be split equally between the reversion company and your estate.
Some customers choose a home reversion because:
Points to consider about a home reversion: