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Is it right for you?

One of the biggest decisions you have to make when considering releasing cash from your home: is equity release the right choice for you?

Your decision will be a lot easier if you have all of the necessary facts and information. This must involve meeting an expert equity release adviser who will explain the details in more depth.

In the meantime, we hope that the information on this page helps you decide whether to go ahead with an independent advice appointment with one of Key's specialists. 

 

Your money


 Whatever has led you to look into equity release, you should keep the following in mind

  • You can use the money however you like, but you’ll have to repay any existing mortgage or secured loan first
  • ​Equity release will reduce the value of your estate
  • The money released is tax free, however it may affect your tax position. Our equity release advisers can explain further

  • All of our advisers use unique software to see whether equity release will affect your entitlement to any means tested benefits

  • The most common type of equity release, a lifetime mortgage, is a loan secured against your home. You should always think carefully before securing a loan against your home.
  • The other type of equity release is a home reversion plan. This involves selling all or part of your property to the reversion company in exchange for a cash lump sum. 
 

Equity release is expected to be a lifetime commitment, so there are typically no monthly repayments. Instead, the loan plus roll up interest is repaid when you pass away or enter into long term care.

This also means that early repayment charges may be applicable if you decide to repay the plan early; these charges can sometimes be quite considerable.  An adviser can explain these details in more depth, including how the compound interest on a lifetime mortgage adds up and can grow quite quickly

At Key, we provide a full advice and recommendation service to ensure you get the best plan possible. Our service is completely free of charge unless you decide to go ahead. Then, our typical advice fee of 1.95% of the amount released would only be payable on completion of a plan.
 

Your family

 

Equity release will reduce the value of your estate, meaning it will affect the amount of inheritance that you’re able to leave. We recommend discussing this with your family members before going ahead, and inviting them to join you at your appointments.

In many cases, family members are pleased to see how equity release will relieve financial pressure or help in other ways. Of a sample of almost 7,000 customers surveyed last year, 70% told us that their family’s response to equity release was positive and supportive.
 
 

Consider all the options

 

Equity release is just one of a number of options that may be available to you. For instance, you may wish to consider the following alternatives

  • Using savings or other investments. If these don't meet your needs , you could consider looking into equity release as an additional means of raising funds. 

  • Downsizing – selling your property to move into another which is smaller (or in a cheaper location). This may have associated financial costs, and can also be an emotional experience. However, your new home may be mortgage free, leaving you financially better off.

  • Asking friends and family for help. While this can be difficult, in many cases the people who care about you would rather help than see you struggle.

  • A traditional loan or mortgage. You’ll need to budget for monthly repayments; make sure that these are affordable before going ahead.

  • Check that you are claiming all of the benefits that you are entitled to. There is more information at Citizen’s Advice and gov.uk.

  • Consider your retirement options, such as how to use your pension pot to secure an income. You can get more information from the Government's PensionWise service

 

Your peace of mind

 

We’re regulated by the Financial Conduct Authority; you can feel sure the advice you’re receiving follows strict regulations designed to keep you safe. 

Plans that have been approved by the Equity Release Council follow a clear set of standards and therefore meet the required product standards, including
  • A no negative equity guarantee – you’ll never owe more than the value of your home

  • The right to move home – if you move to a suitable property, then you can take your plan with you (subject to lender approval).

  • The right to stay in your home for the rest of your life, or until you need to move into full time, long term care.

 
Remember, if equity release isn’t right for you, Key’s advisers will always tell you. 

Key promise

Customer satisfaction is at the heart of everything we do; we pride ourselves on being independent, transparent, supportive and straightforward. We're passionate about helping you to make the most of your finances when you’re in or approaching retirement.

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