The Help to Buy ISA scheme will close to new accounts at midnight on 30 November 2019. What is a Help to Buy ISA and do I need one? The Help to Buy ISA is a savings account that you should open if you are saving to buy your first home. The...
Equity release plans are becoming increasingly popular and enable you to unlock some capital from your home to supplement your income or release a lump sum. If you have an existing mortgage, this will have to be repaid from the equity release.
How can we help?
We have experience in dealing with equity release and are able to offer a combined service for the personal advice and conveyancing aspects which are involved. The right plan, recommended by a reputable organisation or preferably by an independent financial adviser, can be of considerable benefit but every reputable home income plan provider will insist that you take your own independent legal advice and it is very important that you do fully understand the arrangements and the responsibilities involved because this is quite likely to be a lifetime commitment. There are two main types of equity release schemes in which equity can be released from your home: a home reversion plan and a lifetime mortgage.
Home Reversion Plan
In its basic form, all or part of your home is sold to a private company known as a ‘reversion company’ and in return you will receive a cash lump sum, an income or both. You can remain in the house rent-free or for a nominal monthly rent for the rest of your life. When the property is sold, usually after your death or when you move to alternative accommodation, the reversion company receives the proceeds of sale or a share, depending on what share of the property you have sold.
With a lifetime mortgage you borrow against the value of your home releasing a loan which can be used to provide an income, a lump sum or both. The loan does not have to be repaid until you die or when you move to alternative accommodation. Interest, usually at a fixed rate, is compounded and ‘rolled up’ and added to the outstanding loan.