What is Equity Release?

Mortgage equity can be defined as the sum of your mortgage debt and the today’s market value of your home.

If your house is worth £250,000 and the mortgage balance is £100,000, for instance, you have an equity of £150,000.

You can access the money equity you have put into your house by freeing equity. The criteria for equity release will vary depending on your lender, but typically you must be over 55 to do so.

For equity release eligibility:

• Your house must be valued at least £70,000.
• Your house should be in a passable state.
• Your main home, which you have occupied for more than half the year, must be the property from which you want to release equity.
• You must be the owner of the house

Take advantage of the value you have accrued in your house with equity release. If you have paid off your mortgage and are over 55, you could be able to use the money you have accumulated.

Life Term Mortgages

Lifetime mortgages let you discharge a certain amount of your property’s value while you are still a homeowner. This money can be used anyway you like and is not subject to taxes.

The interest on the loan might be paid over time or all at once. However, this can affect the inheritance you can receive. When you, the final homeowner listed on the deed, pass away or enter full-time residential care, you must pay back the loan.

Home Reversion

With Home Reversion, you sell a share of your property in return for a lump amount. While continuing to reside there, you will be aware of the percentage of the house that has been sold. Plans for home conversion may have long-term effects. Any sales from the sale of your property are divided in accordance with how the property was divided.

You won’t likely be able to get these kinds of equity release if you’re under 55. On your mortgage, you might be able to borrow more.