Video transcriptThe money you get from your property through equity release can be used for anything, much like with a secured loan or remortgage, but the main difference is you don`t have to make repayments on the cash each month.
This way of securing funds has certainly been growing in popularity over the past few years, with Equity Release Council figures showing that £473 million was released in the first six months of 2013, compared to £423.9 million and £366.5 million in that period of 2012 and 2011, respectively.
So what exactly does equity release entail? It`s only available to property owners who are retired or are close to it – the minimum age is 55 years old - and it lets them borrow either a lump sum or draw down regular lump sums from the equity that`s built up in their property through their years of mortgage payments.
There are two types of equity release scheme – lifetime mortgages, where the money is taken directly from the property, and home reversion, where you give the provider a percentage share of your house and they provide you with a percentage of its value in return. Remember this is a lifetime mortgage.
To understand the features and risks, ask for a personalised illustration.
The capital and accrued interest are paid back through the sale of the property when you pass on or move into long-term care or sell your home, so you don`t have to worry about making repayments in between.
Some plans let you pay the some or all of the interest on the equity you release from your home to help keep the capital from growing too quickly. These are known as interest only lifetime mortgages.
Discover more about our equity release lifetime mortgage schemes by enquiring at firstchoicefinance.co.uk or by calling up on 0333 003 1505 from a mobile or 0800 298 3000 from a landline.