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Raising money for retirement through equity release is a big financial decision that shouldn’t be taken lightly. There are a number of things for you and potentially your family/beneficiaries to think about. Find out more about equity release and whether it could be the right choice for you with this guide.
Homeowners may look to equity release if they’re looking to turn some of the value of their property into cash. Usually available to applicants 55 and over, you don’t need to have paid off your mortgage in full to unlock some of the equity you’ve got stored in your property. What’s more, you don’t even need to move home.
There are several ways to access the cash released from your equity:
There are 2 types of equity release, each with its own differences.
Whether or not you should take out an equity release product is an individual decision and dependant on your own personal circumstances and needs. What’s right for one customer may not be right for another given the changes to your financial situation it would bring.
When you take out a Lifetime Mortgage, you don’t have to make repayments on it. Instead, your home is sold when the last remaining borrower dies or moves into long-term care, and the loan is then repaid from the proceeds of the sale.
If you want to hold back as much of the value of your home as possible for inheritance to family members, equity release to aid your current lifestyle may not be the way to go. Interest accumulated on the loan will be added to the loan’s original value, meaning you may leave less for your immediate family than you may have hoped for.
If, however, you’re focused on making the most of your assets yourself, or even helping out family members financially before you pass away, equity release might be suitable. You may be looking at making some home improvements, or funding your next holiday. Whether it’s a big or a number of smaller purchases, releasing equity from your home to fund it could help you in achieving your goals.
A lifetime mortgage has its advantages and disadvantages, just like any major financial decision. It’s important to understand the features and benefits before you decide if equity release is a good idea for you.
The upfront cost of a lifetime mortgage will vary between different lenders, depending on any fees which may be charged.
If you’re thinking about releasing equity from your home, you’re likely to be considering plans for retirement and weighing up whether equity release can help you achieve them. You might be looking to pay off another mortgage, or help young relatives make their own next step in life, like a deposit to buy a house.
Lenders have a set of criteria for who can apply for a lifetime mortgage and you must go through an advised process to ensure it will meet your needs as well as ensuring you fully understand any impacts it will have.
Usually, to be eligible for a lifetime mortgage:
Find out if you can apply for a Scottish Widows Bank Lifetime Mortgage by using our Lifetime Mortgage Checker.
Provided you meet the initial criteria, you’ll then speak to an adviser who will look to understand your individual needs and circumstances in order to see if a lifetime mortgage might be right for you, at a time that suits you.
Or, you can call us on 0345 122 1607. Our lines are open Monday to Friday 8am – 8pm, Saturday 9am – 4pm. We’re closed on Sundays and Bank Holidays.
It can take around eight weeks for an application for a lifetime mortgage to be completed, and for you to receive the funds. However this could be shorter or longer depending on your circumstances.
Our equity release mortgages are regulated by the Financial Conduct Authority (FCA) and abide by the standards set by the Equity Release Council (ERC).
You can pay back part, or all, of the amount borrowed whenever you like. Be aware though that early repayment charges may be payable.
It depends on the type of equity release you have. If you have a lifetime mortgage, you can transfer it to your new home however your new home must meet the lender’s lending criteria at the time. But if you have a home reversion plan, you may not have enough equity in your home to purchase a new one.
Usually the minimum age is 55 with a maximum age of 85 although these can vary between lenders.