The ability to release cash or income from unencumbered property has
long been available and, although some schemes fell into disfavour in the
past, the better ones offer a very clear and straightforward structure.
Over 60 and need cash or income?
The better equity release schemes now offer;
- The ability to release cash from an existing unencumbered property from the age of 60
- No monthly loan payments
- Accrued interest and charges are repaid from the proceeds of the property sale on death
- No early redemption charges if redemption is a result of property being sold or on death of
the surviving borrower or upon a move into long term care. Also there is often no penalty
for redemption of the loan after the first five years.
- If you move house, the loan can move with you
These schemes are usually set up on a fixed interest rate for the life of the facility. The amount of equity that can be released generally varies between 20% to 50% depending upon age. Regardless of whether your requirements are for cash or income, this facility is appropriate for most requirements. Inheritance Tax planning opportunities are also available.
Most schemes offer a facility which will enable you to pay off the mortgage after a five-year period, this is quite often a useful re-mortgage option for those unable to effect a more conventional re-mortgage due to lenders' requirements of monthly income. With the equity release strategy, the affordability issue is done away with as there is no need to pay monthly interest.
TIP: Always seek independent financial advice in order to ensure that a more "suitable" solution is not available. (Charlwood Leigh only recommend Safe Home Income Plans ("SHIP") Products.
