If you have paid most or all of your current mortgage, you may want to consider a capital release plan.
Equity Releasecan provide you with a large sum of money to spend while still allowing you to continue living in your home. It can be particularly useful to cover large expenses later in life, such as long-term care. Equity release is also an option for people with an interest-only mortgage, but who don't have a real plan to repay the principal they have borrowed when the mortgage comes to an end, except to sell the property itself.
By freeing up capital through a capital release agreement, these borrowers can use that money to liquidate the capital they owe and stay in their own home. The release of capital can provide a useful way for older homeowners to access the equity accumulated on their property. It will not be suitable for everyone, but under the right circumstances, the capital release could be used to supplement your pension income or provide a lump sum, all while you live in your home. Capital release refers to a range of products that allow you to access capital (cash) immobilized in your home if you are older.
You can accept the money you release as a lump sum or, in several smaller amounts, or as a combination of both. A capital release mortgage involves a lender giving you cash in exchange for a portion of the proceeds from the sale of your property later on. But unlike a traditional mortgage, which you pay over a certain term, a capital release loan is not settled until you leave your home. With the release of capital, there is no need to move.
Some people decide to use part of the money they release to make home improvements. This could allow them to enjoy retirement without worrying about fixing things around the house or making alterations as they age. Releasing capital may be a good idea for seniors who want to earn some extra money in retirement. Freeing up capital can help you make improvements to your home, pay for care costs, help a loved one who is struggling financially, or pay other debts.
Perhaps the biggest selling point of freeing up equity is that you can leverage the value of your home without having to sell it and move somewhere else. Leave your contact details below and a member of the capital release team will call you to discuss your needs. Whichever path to advice you take, you'll have the opportunity to analyze your circumstances and determine if capital release is your best option. As described above, the risks associated with releasing capital depend on the type of capital release you are interested in.
Separately, lenders typically charge an opening fee for a capital release product, although these can be quite low. There are many potential advantages of releasing capital, which could be attractive if you have the equity of the house you want to unlock. Your entitlement to certain benefits is established on an income control basis, such as pension credit, for example, and any money you receive by releasing capital could mean that you no longer qualify. Many people consider releasing capital at a later stage of life, but are not sure whether a capital release product will be right for their situation.
Freeing up equity is becoming an increasingly popular option for older homeowners who want to unlock some of the value of their property but still live in their home. Your advisor is also obliged to inform you if there are more suitable options for you or if the release of capital is not appropriate in your circumstances. Look for the Equity Release Council approval mark to ensure you are using a trusted provider. This will vary depending on the lender, the value of your property, your age at the beginning, and the type of equity release plan you choose.
Comparison site Equity Release Supermarket shows multi-vendor rates range from 2.86% to 6.9%. You should contact a specialist advisor to learn more about the pros and cons of freeing up your home equity. Releasing capital may be right for you, but it's important to think about the pros and cons before making any major decisions. .