Equity Release Specialists CheshireFrequently Asked Questions
Equity Release Specialists Cheshire
Yes, you still own your home after taking an Equity Release mortgage. It remains your home until you go into residential care, or die. At the occurrence of either event, your home will be sold, and the outstanding loan plus interest repaid.
Can I make payments, or even re-pay the mortgage at some later date?
Yes, with most plans you can make payments of up to 10% per annum, this will mean repaying the interest and some capital. Over a period of time you may even repay the loan in full if you wanted to.
Yes, you can move home, providing the new home has sufficient equity to retain your existing loan, otherwise you may have to repay some of the balance outstanding.
Will there be something left for my children?
In most cases, based on the percentage borrowed, and the increase in property value, there will normally be a surplus after the loan and interest have been deducted from the property value.
Do I have to take all the money now?
No, you can draw down funds as you need them. You only pay interest on what you draw down. This helps to reduce the interest and keep it less expensive over a long period.
What happens if one partner is much younger than the other?
No problem, the Equity Release mortgage can be taken out in one person’s name, with the other partner still able to live there. On moving into care, or on death, anyone not on the mortgage will have to vacate the property.
Can I still arrange this if one or more of my children still lives at home?
Yes, this is easily arranged, it just needs a simple form to be signed by anyone over 17.
What happens, if my house decreases in value after I have taken the mortgage out?
There is a clause in all equity release plans called a “no negative equity guarantee”. This means that any shortfall after the mortgage and interest is paid off is written off by the lender.
Can I own more than property, say a house and a holiday home?
Yes, these plans are ideal for such a venture. You can own a holiday home without increasing your monthly outgoings.
Why use equity release instead of cashing in my pension fund?
Most pension funds are not big enough to pay off existing mortgages or to provide all the funds needed to meet a client’s requirements. Pension funds are there to provide an income, spending the capital reduces this income. But pension funds are taxable, whereas funds from equity release are tax free.
Will it affect my Inheritance liability?
Yes, but in a positive way. At death, debts are paid off first, therefore an equity release mortgage reduces the size of the estate, and could take an estate below the tax threshold.
Do I have to borrow against my home?
No, you can borrow against any property that you own, buy to let property, and holiday cottages. You can also borrow against more than one property.