Equity Release allows those aged at least 55 to use equity within their home to provide a lump sum, income or a combination of both.
This allows you to release a lump sum from your property, whilst retaining ownership of your property. This may involve either the payment of interest or interest being rolled up. Where interest is rolled up it will be on a compound basis i.e. in year two interest is due on the initial advance and the interest from year one. Both the amount you draw plus the interest are payable from the sale of the property.
This is similar to a Lifetime Mortgage, however, you release the money as and when you need it. This means that the interest only becomes payable as you release the funds.
Guarantee inheritance – available with certain lifetime mortgage contracts, allowing you to guarantee a percentage of the property value at death. Essentially, it builds in an equivalent to the no negative equity guarantee but at a percentage of the property value lower than 100%. i.e. with a 20% inheritance guarantee, your estate will never be left with a debt greater than 80% of the property value allowing the other 20% of value to be passed on to your beneficiaries.
This is a lifetime mortgage. To understand the features and risks, please ask for a personalised illustration. Check that this mortgage will meet your needs if you want to move or sell your home or you want your family to inherit it. If you are in any doubt, seek independent advice.
Lifetime Mortgages can quickly erode the remaining equity, and as a result, there may be no value left to pass on.
AM Mortgages (NE) Ltd is unable to advise on lifetime mortgages, but we can refer you to a trusted partner, who may charge a fee for advice.