Our Advisor, Paul Neal is a CeRER qualified Equity Release advisor, based in Derby. He specialises in making sure Equity Release is right for you, he will take as long as it takes to ensure that you and your family understand the process, the costs, benefits and the risks.
Equity release is a big financial commitment, so understanding what it would mean for you and your family is really important. Here’s an overview of the key considerations.
How does equity release work?
Equity release is a way of taking out cash from the value of your home, if you’re aged 55 or over, without having to move.
It’s a long-term loan that’s eventually repaid using your home once you pass away, or if you need to go into long-term care. Until then, you’ll remain a homeowner and won’t need to move out.
You can receive either a one-off lump sum payment or a lump sum, with a cash reserve to draw from in the future.
The loan is secured against your property and you retain ownership. You can protect a portion of the property for inheritance purposes.
Interest is charged and added to the balance, which is cleared when you (or the second applicant if the loan is in joint names) either pass away or move into long term care.
The property is then sold to clear the outstanding balance. You can have the option to clear some interest either monthly or at your choosing, to decrease the amount owed at the end. Anything left is then passed to your beneficiaries.
You can either take a lump sum or a drawdown facility, depending on how much you need and when and this can reduce the build-up of interest.
The older you are, the more money you can take out. Read our Frequently Asked Questions
Why choose Equity Release?
Some typical reasons for taking out equity release might be to:
Adapt your home, so you can continue to live independently
Renovate or refurnish parts of your home
Top up your retirement income
Pay one-off private medical bills, or receive ongoing care at home
Help children and grandchildren with house deposits, weddings or other major events
Manage your estate, wealth and tax planning, and leave a living inheritance
Pay off an outstanding mortgage, including the shortfall on an interest-only mortgage
Fund leisure interests, a new car, a holiday, or visiting relatives abroad
How do I repay a lifetime mortgage?
Of the two types of equity release, Missing Element Mortgage Services only offer Lifetime Mortgages.
A lifetime mortgage doesn’t have a set repayment date and you don’t have to repay any of the money you borrow, or any of the interest, until:
you die; or move permanently out of the home and into long-term care.
If the lifetime mortgage is in joint names, nothing is repaid until the last person dies or moves permanently out of the home and into long-term care.
The loan is usually repaid through the sale of your home.
You can also choose to repay some of the money you borrowed.
This will reduce how much you owe.
Depending on which product you take out, you can choose to pay some, none or all of the interest.
Optional repayments: You can choose to make partial repayments to manage the amount owed on the loan and interest. Subject to Terms and Conditions.
Make monthly interest payments: You can pay some or all of the monthly interest to reduce the overall cost of the loan.
Pay back the full loan and interest: It is possible to pay back the full amount but if you do, you may have to pay an Early Repayment Charge, which could be substantial.
There are limits on how much you can repay and how often you can make repayments. We will help find the right product for you.
How do I apply for equity release?
Choosing an equity release mortgage is a big decision. For that reason, you can only apply for equity release through a qualified financial adviser.
We will help you understand the options available and decide whether equity release is the right choice for you.
We will also work with you to find the right provider.
We offer equity release advice and use our Equity Release Calculator
If you’d like to speak to one of our specialist team about your options, visit our Contact Us page.
See our latest blogs on the Equity Release: