Is equity release safe?
All advisers at Key Retirement follow strict rules and guidelines, ensuring each customer receives the correct recommended plan type and the plan meets their needs, making equity release plans both accessible and safe.
With Equity Release Council (ERC) approved plans a number of guarantees are available. These include a no negative equity guarantee, the right to remain in your property for life and the right to move to another property (subject to criteria).
There are two types of equity release - lifetime mortgages
and home reversion
plans. Both are fully regulated by the Financial Conduct Authority (FCA)
Who owns my home if I take out a plan?
You will remain the owner of your home if you take out a lifetime mortgage
. But with a home reversion plan
you are selling all or part of your home to the reversion provider in exchange for cash. All of these plans, however, allow you to stay in your home until you and your partner pass away or move into long term care.
Can I remain in my home for the rest of my life?
We recommend plans which have this guarantee, so you can stay in your home as long as you wish. This feature applies to both lifetime mortgages and home reversion plans, but is also subject to your adherence to the terms and conditions of the plan.
Can I take out equity release if I've not finished paying off my mortgage?
Yes, but it will be a condition of the plan provider that the equity release is first used to repay the outstanding mortgage amount.
How much equity can I release?
The amount of money you are able to release from your home will depend upon a number of factors such as your ages, property value, health and lifestyle. Try our free equity release calculator
, for an instant online quote.
Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits.
What will happen when I pass away?
If you have a joint plan and your partner survives you, then your equity release will not be affected and they will be able to remain in their home for as long as they choose.
If your equity release plan is in your name only, your house will be sold and the equity release provider will take their money from the sale proceeds. The remainder will go to your estate.
Can I guarantee an inheritance for my loved ones?
Yes, this is possible. There are plans available that allow you to protect a percentage of your home’s value so that you can guarantee an inheritance. If this is important to you make sure you tell your adviser if you require this feature.
What happens if I move into long-term care?
If your equity release plan was taken out jointly with your partner, they would be able to continue living in the home without impacting your means test for long-term care fees.
If your equity release plan is solely in your name, your home would be sold and the equity release provider would receive the money owing to them from the proceeds. The remainder will go to your estate.
Will I have monthly repayments to make?
Unless you choose to take out an interest payment plan, there are typically no monthly repayments to make. This is because the loan, plus roll up interest, is repaid when the plan comes to an end. The total amount owing to the provider will then be paid from the sale of your home.
Can I move house in the future if I've taken out equity release?
You are able to move house in the future if you wish. You can either repay the amount owned plus any early repayment charges, or transfer the plan to your new home. Each provider has specific criteria that applies concerning moving home, so you should check this when you take out a plan.
What will equity release cost me?
Unless you decide to go ahead, Key's service is completely free of charge, as our typical advice fee of 1.65% of the amount released would only be payable on completion of a plan. You are likely to incur costs for surveyor’s fees and solicitor’s fees, as well as providers arrangement fees, although some providers may make a full or partial contribution to this.
Will my family end up in debt because of my equity release?
The Equity Release Council approved plans we recommend come with a no negative equity guarantee. This means you can never owe more than the value of your home. If you are considering equity release we recommend that you read is it right for you?
Should I discuss my plans with my family?
It is important to involve your family in any financial decision which will reduce the value of the inheritance left to them. We find that most families are incredibly supportive of their loved ones’ decision to take out an equity release plan to boost their retirement finances.
We actively encourage each of our customers to invite as many family members or friends that they wish to their equity release consultation
, enabling everyone to get a full picture of equity release before any decisions are made.