10 Frequently Asked Questions about Equity Release Schemes

10 Frequently Asked Questions about Equity Release Schemes

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There are a lot of frequently asked questions when it comes to the equity release market. Here we have listed a few of the common questions to provide guidance to those seeking help in finding the best equity release scheme. Find out more about Equity Release Market in below 1 FAQs:

1. Will I qualify?
The qualification is dependent on the age of the youngest person on the title deeds as well as the property criteria. The minimum age for lifetime mortgages is 55 and for that of a home reversion plan is 65.

2. How much should I release?
Initially, you should only be drawing an amount that you have a purpose for as it will cost you interest in drawing more money than you need. It’s not a good idea to withdraw equity for investment. However, if you need more cash in future, you can go for options like drawdown lifetime mortgage for your personal circumstances.

3. Who should I speak to?
Since it is an important decision, so it is highly advised to discuss it with your family because they would be affected the most by a release of equity from your property. Seeking advice from a qualified Independent Equity Release specialist is also recommended as they have direct access to the best equity release scheme from lifetime mortgage schemes to home reversion plans.

4. How will my property be valued?
Your home will be surveyed by an independent valuer to determine the amount available to you. The value will be based on similar properties sold in the area. An equity release offer that would outline the terms of the equity release plan will be produced as a result.

5. What happens if I die or move into long-term care?
In case you die or move into long-term care, your executors will contact the equity release provider who will be responsible for repayment of the plan. This is usually done by the sale of the property which needs to be within 6 to 12 months.

6. Can releasing equity affect my state benefits?
Yes, the release of equity can affect your state benefits from pension credit and savings credit to council tax benefit. So, it is important for London Equity Release to understand your circumstances and to come forward with the best equity release advice to ensure benefits aren’t lost.

7. Who owns my property?
In case of lifetime mortgage, you will retain full ownership of the property as well as 100% of any escalation in the property value. While in case of a home reversion scheme, you will no longer fully own the property and the ownership will be dependent on how much of the property is sold to the home reversion company.

8. What are the fees?
London Equity Release charges no upfront fees for the initial consultation but will charge advice fee if you decide to proceed with us.

9. Can I still move house?
All Equity Release Council members allow you to move house if it meets the provider’s lending criteria and will be dependent on the property value and hence need to be considered on an individual basis.

10. Will I have to pay tax?
The lump sum you will receive would be tax-free. However, if you invest the cash in providing an income, then a part of the income or the growth in investments might become taxable.

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