Equity release for a home in Essex

With beautiful beaches, London just a short commute away, great shopping and eating out option, plus tons of leisure and cultural attractions to fill up your free time, it’s no surprise that Essex properties are highly sought after, and consequently increasing in value. Many people work hard all their life to pay for a lovely family home, tying all their financial assets to the property they need to live in.

There are several options open to homeowners who want or need to create some ready cash as they age. Some choose to rent a room out, re-mortgage the property, take a part time job, or sell up and downsize to a cheaper place, which may be out of the area completely. Others want to continue living in the familiar place they call home, but also to enjoy the financial benefits their property can bring them. This is where equity release schemes can prove to be an excellent choice.

What are equity releases schemes?

Most schemes involve someone lending the property owner(s) a percentage of their property’s market value without any need for repayment until the person (or people) named on the agreement have passed away. This cash is tax free, though it could affect entitlement to benefits.  The property is still owned, and maintained, by you, but if you have to move into permanent residential care the property will not be counted as an asset to be sold to meet any fees due.

Is everyone with an Essex property eligible for an equity release scheme?

In general the main qualifying criteria are that the youngest applicant is aged 55 years or older, and that those applying own the home outright. In some cases lenders may consider those with small outstanding mortgages – in fact some people use part of the cash sum they receive to settle that debt. There may be a minimum value threshold applied to properties before they can be considered.

Do all equity release schemes pay a lump sum?

No. Standard and enhanced lifetime mortgages do, as does the interest only lifetime mortgage. A drawdown lifetime mortgage offers the same amount of cash any other equity release scheme would, but the home owners are able to borrow from that pot as they choose, rather than all at once.

Choosing the right type of equity release scheme

There’s no doubt the world of equity release can be confusing for anyone new to it, so it’s important you get independent advice and information on the types of scheme available, and which may be best suited or your circumstances, before making any decisions.

A standard lifetime mortgage is good for those who want an instant cash sum, no repayments during their lifetime and the security of knowing they remain the home owner, and can reside in the property for the rest of their lives.

A draw down lifetime mortgage offers all the same benefits but the cash is only borrowed as the home owner wishes. This tends to suit people who want the security of a nest egg on tap. The final total owing is calculated based on the total actually borrowed, plus charges, rather than one large lump sum.

Interest only mortgage payments offer Essex homeowners the opportunity to release some equity but also, as interest payments on the total borrowed are made monthly, if all goes well the final total owing will leave equity in the property for family members to inherit.

Are there any rules about what you can do with the cash?

No. Some people choose to invest the cash and generate an income, update a kitchen or bathroom, buy new cars or perhaps a motorbike or caravan. Others enjoy travelling, pay off current debts, start a small business, or use some to help out family members with something special like a wedding or a house deposit. You do not need to declare your plans for the money to be eligible for an equity release scheme.

Essex are there any catches?

Equity release schemes offered by reputable brokers are safe, but it is not a decision to make lightly and it is wise to discuss your plans worth close family before going ahead. All schemes are going to impact on any potential inheritance, and as such it’s best to avoid potential strife down the line.

Essex home owners have a fabulous opportunity to cash in on the value of their home county property, so if you are interested in finding out more about what this could mean for you please get in touch for some expert, independent advice.