Here we answer the most common questions asked about equity release. If having read this information you still require further advice then please feel free to contact us. We will happily answer any questions you have, in person.
What is equity?
Equity is the value of your property less any debt such as a mortgage
What is equity release?
Equity Release allows you to unlock the equity in your home without having to sell up and move out so that you can have money to spend on whatever you want or need. An equity release plan is potential retirement planning option for homeowners
What is the History of equity release?
Following the journey of equity release from the first plan of the 1960’s to today’s market with a wide choice of SHIP (Safe Home Income Plans) and fully regulated plans with various safeguards and guarantees.
Am I eligible for equity release?
To be eligible for an equity release plan you need to be a homeowner. If you own your own home with a partner then both of you need to be aged 55 or over at the time of the application. Have you tired our simple and free equity release calculator to see if you qualify for equity release, and if so how much?
What can equity release be used for?
Equity release can be used for a Varity of things including:
- Increasing disposable income
- Funding retirement
- Home improvements
- Providing financial help to family members or friends
- Taking a dream holiday or regular breaks
- Repayment of an existing mortgage
- As a temporary stop-gap to tide you over financially whilst you wait for your pension, an inheritance or any other tied up investments to be released – once you have the cash you’ve been waiting for, you can pay off your loan
- Funding the purchase of a new home at a higher value than your existing property
- Improving or maintaining a lifestyle standard
- Enjoying hobbies and pastimes • Buying a new car
- Paying for a carer, gardener or cleaner
- Reducing the value of your estate and mitigating inheritance tax
Is equity release right for me?
To allow us to answer that question accurately, we will need to talk to you and we can do this in your own home, with a family member in attendance if you wish to make you feel as comfortable as possible Whilst thousands of people do benefit from equity release there are several points to consider before entering into any plan and in some circumstances there are other options that could provide what you are looking for.
What are the alternatives to Equity Release?
An equity release plan can prove to be a useful retirement planning option for homeowners. However, there are alternatives to be considered than could prove a more effective financial solution and HBFS will fully discuss these with you as part of your free initial consultation. Thee include:
- Moving to a smaller or less expensive property
- Accepting financial support from family and friends
- Claiming your entitlement to means tested benefits
- Local Authority home improvements grants • Using savings or unlocking existing investments
- Using a traditional mortgage
How safe is Equity Release?
Many people ask if equity release is safe and are worried that they will lose their home as a result of taking out an equity release plan. You WILL NOT lose your home as long as you take out an equity release plan endorsed by SHIP, or one that offers the same guarantee, as this means you will retain the right to remain in your property for life providing it remains your main residence. HBFS is regulated by the FSA and only recommends equity release products endorsed by Safe Home Income Plan (SHIP) or those with the same set of guarantees.
What are SHIP Equity release plans?
HBFS recommends Safe Home Income Plans (SHIP) equity release plans and those with the same guarantees. These guarantees are in your best interests and are as follows:
- No negative Equity Guarantee – you or your family will never owe more than the value of your home
- You will not lose you home and can remain there for as long as you wish providing it remains your main residence
- No debt left to your loved ones
- You can move to another suitable property
- You retain the right to seek independent legal advice from an equity release solicitor of your choice
Why take independent equity release advice?
There are several equity release plans to choose from and choosing the right one for your specific circumstances is vital because it could result in considerable long-term savings. The FSA states that should you opt not to take independent financial advice and go onto choose an unsuitable equity release scheme then you will have fewer grounds for complaint. HBFS is regulated by the FSA and provides independent financial advice especially on equity release.
What happens if my partner or I need long-term care?
Your equity release scheme will usually carry on unchanged if care is provided in your own home or if one of you moves to a residential or nursing home. If you both move into a care home, the scheme will usually end and the property will be sold.
Further reading – what happens if my partner or I need long-term care?
Can the equity release provider change the agreement?
No. You can rest assured your arrangement cannot change from the original contract signed with your solicitor
What if I decide to move home or to repay the loan?
- You can transfer your equity release plan to your new home if you move providing the property meets the criteria of your equity release plan provider at that time. If you have taken out a lifetime mortgage, you may be able to repay that.
Are there different types of regulated equity release?
Yes; there are four different types of regulated equity release, each of which will be fully explained to you during your initial consultation and we will show you clear examples of how each of them work.
- Lump sum lifetime mortgages
- Lifetime mortgage with flexible cash release
- Interest only lifetime mortgages
- Home reversion plans
What equity release providers do you use?
- HBFS are whole of market equity release advisers, which means we deal with all of the equity release product providers and have access to all available plans.
What areas of the UK do you cover?
HBFS has a team of independent equity release providers covering England, Scotland and Wales; the following is just a a small section off the areas we cover in the uk, but please be assured that wherever you are in the UK HBFS independent advisers will visit you and provide face to face advice on equity release.
How much equity can I release?
- How much tax-free cash you can release depends on number of factors, which will be discussed with you during our advice process. Our initial consultation is FREE of charge so please get in touch to arrange for one of our friendly advisors to visit you in the comfort of your own home, wherever you are in the UK.
Who can benefit from equity release?
- Equity release is available to homeowners who are aged 55 and over, and could benefit from either an additional lump sum of money or a more gradual injection of funds over time.Because the money raised using equity release is yours in the first place- your simply releasing it – the cash that you receive is tax-free and can be spent on whatever you like.However, if you have a mortgage secured against the property, some of the money you release must be used to pay this off.Furthermore, with the most popular form of equity release, the lifetime mortgage, there are no regular repayments to make; and you continue to own 100% of your home throughout.Her are some popular examples of how equity release could help you
- Home Improvements
- Clearing your mortgage
- Improving your lifestyle
- Financial peace of mind
- Migrating inheritance tax
- Helping family members