How to release equity from property

Ashley4569

My parents are wanting to release equity from their property. They are in early 70's, no mortgage. What is the best equity release scheme in this scenario? I have seen that there a few different options but not sure which is the best in the current climate.

Malky

The easiest and less stressful way with no long terms worries is to sell up and downsize or rent. Is that an option?

kingstreet

Information from the trade body which represents equity release lenders;-

http://www.ship-ltd.org/

JQ.

You buy the house off them for full market value and rent it back to them.

holly_hobby

equity release options - not requiring a monthly repayment

Lifetime mortgage

How much released
% of equity released - dependant on applicants age

Costs involved
Legal fees, product set up fees & redemption fees, with the interest chargeable on loan over the term held "rolled" up onto the initial amount borrowed.

When is it repaid
Full amount repayable on 2nd death (in the case of joint applicants), or entry into long term care arrangements.

Vital consideration
Ensure member of SHIP - with mge contract having a "no negative equity clause" on redemption & terms of the contract are entirely suitable to individual needs and requirements

Home reversion scheme

What is it & how much released

Applicants sell a % of the equity in the property to a provider (% dependant on age of applicant and available equity), whilst retaining a lifetime residence in their home

Costs involved
Legal fees, product arrangement fees & redemption penalties

When is it repaid
Upon death (2nd death in the case of spouses) of the borrower, entry into long term care (sale of property

Vital consideration
Again ensure "no negative equity clause" on redemption & terms of the contract are entirely suitable to individual needs and requirements

Further consideration in all cases
Equity release may have a negative impact on any means tested benefits the applicants are in reciept of, or may qualify for, including the possability of receipt of state contribution to long term care costs.

Accordingly professional advice should be sought, by a suitably qualified professional (lifetime mges/long term care), whereby the adviser should establish (if equity release is being considered to solely assist with daily living costs), that the applicants are in reciept of all state benefits and income that may be available or due to them. Whereby if it is discovered the individual(s) are not currently excercising all available avenues of revenue, the requirement of entering into a lifetime mge arrangement may actually be avoided, or the % reqd reduced.

Holly