Releasing Equity

If you are aged 55 or over you may be considering releasing equity in your home either to raise capital or to provide additional income. There are currently two ways of approaching this:

Equity Release

These schemes allow you to borrow an amount of capital based on the value of your home. You can choose to defer the interest payments until death or transfer to permanent residential care. The interest rate and therefore the amount you will owe will be clear from outset.

Home Reversion

These schemes are structured on the current value of your home. You borrow a percentage of the value and the same percentage is repaid to the lender in the event of death or transfer to permanent residential care. The final amount owed will depend on the value of your property at the time the loan is repaid.

With both of the above, as a rule the older the applicant the larger the sum that can be raised. All schemes have a “No negative equity” guarantee so you can be reassured that the debt will never exceed the value of your home.

Ash-Ridge are independent advisers for both of the above schemes. Equity Release and Home Reversion arrangements are complex and it is essential that advice is taken to ensure they are fully understood. They should be treated as long term commitments with little or no flexibility therefore alternative options should also be explored.