The details below highlight some of the key terms used by the equity release companies. Check them out and see which ones are important to you.
This allows you to make ad-hoc or regular repayments. These are typically up to ten per cent of the initial loan each year. They usually come with no early repayment charge (ERC). This feature will help you to minimise the build-up of interest. So, you can even reduce the loan over time.
This will allow you to withdraw money in stages rather than taking a single lump sum. So this will help you to keep costs down as interest is only applied when the money is withdrawn.
It reduces the maximum loan amount but enables a fixed percentage of the property value to be ring-fenced as a minimum for inheritance. This feature is regardless of the total interest accounted by the loan.
Early repayment charges are a fixed percentage of the initial loan. Typically these fees decrease on a sliding scale over a period of time. Once the fixed period has ended you can repay the loan in full without an ERC.
This will allow you to downsize to a smaller property and repay the loan. This can be either voluntarily or if the new property does not fit the providers’ criteria, without incurring an ERC. In addition, typically there is a qualifying period of five years before the feature applies.
Your equity release mortgage can be secured against sheltered or age-restricted properties. This would be subject to the provider’s specific criteria at the time.
This allows for either full or partial interest repayment to be made each month by you. Also, it will either stop or reduce the interest being rolled up onto the loan. Remember that there is no risk of repossession if payments are missed as you can stop the monthly repayments and revert to the interest rolling-up at any time.
The above definitions have come directly from “The Equity Release Council”. Anstee & Co and our equity release advisers are registered with them. This ensures that you receive the highest professional standards within the industry.
We are a firm of Independent Finacial Advisers (IFA’s). This means that the financial advice we provide is unbiased. This is unlike some financial advisers who will work from a limited panel or recommended solely their own products.
As a homeowner, your property is probably your biggest asset. Releasing the cash that has built up in your home should not be taken likely. We would recommend that where appropriate you involve your close family. A Lifetime mortgage may affect your entailment to state benefits and will reduce the value of your estate. You need to be over the age of 55 and a United Kingdom homeowner.
To find out if equity release is right for you why not arrange an appointment with one of our expert advisers.
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