How Does Equity Release in London Work?

Equity release in London is a financial option designed for homeowners aged 55 or over. It provides them with the opportunity to access tax-free funds from the equity tied up in their homes. One of the key advantages of equity release is that it typically allows you to retain full ownership of your property.

With most equity release plans in London, you have flexibility in how you access these funds. You can opt to receive the money as a lump sum, providing you with a substantial amount upfront.

Alternatively, you can choose to receive it in smaller increments as and when you need it. This flexibility is especially useful for managing your finances effectively.

It’s important to note that equity release plans involve interest, and the interest can accumulate over time. Therefore, it’s a good idea to seek excellent mortgage advice in London when considering equity release in London.

A knowledgeable mortgage advisor in London can help you make informed decisions to minimise the interest payable and ensure that equity release aligns with your financial goals and needs.

What is Equity Release in London?

Equity release in London is specifically tailored for homeowners who are 55 years old or older. To be eligible, your property must be your primary residence and have a value of at least £70,000.

In cases where the property is jointly owned, the youngest homeowner on the title must be aged 55 or above to qualify for equity release in London.

The amount of tax-free funds you can release through equity release in London depends on several factors. These factors include your age, your health, and the current value of your property.

There are primarily two types of equity release schemes available. The most commonly recommended option is the lifetime mortgage in London, which provides flexibility and various benefits.

The other option is a home reversion plan, which involves selling a portion of your property. It’s essential to carefully consider these options and seek professional advice to determine which one aligns best with your financial situation and goals.

What is a Lifetime Mortgage in London?

A highly recommended form of equity release plan is the lifetime mortgage. This option allows you to access tax-free funds from your home, which can be received either as a lump sum or in smaller portions, depending on your needs.

When you opt for a lifetime mortgage in London, it’s key to understand that you will maintain complete ownership of your home. What sets lifetime mortgages apart is their flexibility.

You have the choice to make monthly interest payments, similar to a standard mortgage, or you can decide not to make any payments, allowing the interest to accrue over time.

Obtaining reliable mortgage advice in London is of utmost importance in this process. Unfortunately, we frequently encounter cases where clients have received subpar advice or advice that is limited to equity release plans.

It’s essential to ensure that your equity release advisor in London provides guidance on the full spectrum of later-life lending solutions and operates independently.

We are among the few companies in London capable of offering advice on the complete range of options while remaining independent. This ensures that you receive comprehensive and unbiased advice tailored to your unique financial situation and goals.

What is a Home Reversion Plan?

A less common form of equity release scheme is the home reversion plan. With this plan, you essentially sell all or a portion of your property at a value below its market worth, in exchange for a lump sum that is tax-free.

The received lump sum can be utilised for various purposes, including funding long-term care if you wish to continue residing in your home.

It’s worth noting that home reversion plans are seldom the first choice recommended, but they can be suitable for specific individuals with the right circumstances and needs.

Is Equity Release in London right for me?

At Londonmoneyman, we belong to a select group of mortgage advisors in London, who have the expertise to consider the complete range of later life mortgage products.

This comprehensive range includes, in order of evaluation, standard mortgages that, in certain cases, can extend up to the age of 85, a diverse selection of specialised retirement interest-only mortgage products (known as RIOs), and lifetime mortgages, which encompass equity release plans.

Our dedicated later life team is dedicated to recommending the most suitable product or combination of products tailored to your individual circumstances. It’s important to bear in mind that equity release is just one option, and there may be other alternatives better suited to your unique needs and situation.

It’s essential to note that equity release plans can only be applied to your primary residence in London, not to secondary homes or buy to let properties. In cases involving secondary homes or buy to let properties in London, standard mortgage options might be more appropriate.

The Application Process

If you’re prepared to move forward with us, we’re eager to connect with you. You can reach out via telephone or conveniently book an appointment online to set up a complimentary consultation, without any obligations attached.

During this consultation, we can delve into the possibilities for equity release in London that suit your needs. Rest assured, we’re here to address all your queries and guide you towards the most suitable path. In our initial conversation, we only require your ages and your address – nothing more.

Additionally, for your convenience, we offer evening calls to accommodate your work or family commitments.

Do I have to make monthly payments with Equity Release in London?

Certainly, when considering lifetime mortgages in London, you have several payment options to choose from. You can decide to make no monthly payments, allowing the interest to accumulate over time, or opt for monthly interest payments, similar to a regular mortgage.

Additionally, some plans offer the choice to pay a set, affordable monthly amount to keep interest costs to a minimum. It’s worth noting that you’ll only pay interest on the amount you release from your property.

For instance, if your lifetime mortgage is approved for £100,000 but you only require £10,000 in the first year, you’ll only pay interest on that £10,000 until you need more funds.

To determine the best approach for your individual situation, it’s advisable to consult with an independent equity release advisor in London, like our team.

To understand the features and risks, ask for a personalised illustration. Equity Release in London may come in the form of a lifetime mortgage or home reversion plan.

A lifetime mortgage in London may impact the value of your estate and it could affect your entitlement to current and future means tested benefits. The loan plus accrued interest will repayable upon death or moving into long term care.

A home reversion plan involves selling all or part of your home to a plan provider in exchange for a tax-free lump sum.

Date Last Edited: September 11, 2023