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You may find yourself in a situation where you are looking for an injection of funds but wish to stay in your own home. Releasing equity may help you with your financial needs. Usually, it is more mature people who wish to do this.
Equity is what is left over if you were to sell your property. So it is the value of your property less any mortgage or loan on it.
Often people do not want to move but need extra income or may want to make gifts of their equity to family, etc. for tax reasons.
If your home is your main financial asset, you might choose to enjoy the equity/monies stored up in your home during your lifetime. Perhaps you would like to have a wonderful holiday, carry out work to the property or make gifts to loved ones.
There are two main types of equity release scheme available: a home reversion plan or a lifetime mortgage.
A home reversion plan means that all or perhaps part of your home is sold to a private company. In return, you would get a cash lump sum, an income, or sometimes both. You would stay in your home rent-free or for a small monthly rent until the property is sold. When the property is eventually sold, the private company would receive the proceeds of the sale depending on the share of the property that you sold.
A lifetime mortgage is loaned against the value of your home which again could be paid as a lump sum, an income, or both. You can continue to live in your home and will keep full legal ownership. Usually, the loan does not need to be repaid until you pass away or move into alternative accommodation.
When entering into either type of scheme, you will need to consider the impact the lump sum or income will have on any welfare benefits you receive, capital gains tax, income tax and inheritance tax.
An independent financial advisor can guide you through what sort of equity release mortgage is best for you since there are a variety of schemes available.
Why Choose Biscoes?
At Biscoes, our team can assist you with the legal work needed for this type of transaction. We have specialist members of our Residential Property Team who are able to advise you fully, based on their years of experience dealing with similar matters.
Every client benefits from a designated lawyer to guide you through the process and oversee the transaction from the point of instruction through to completion. We also have an internal locum who provides cover in the event your designated lawyer is unwell or on holiday, to ensure there is no delay to your matter.
We can visit you at home to go through the paperwork if this is easier for you.
Biscoes is a member of the Law Society’s Conveyancing Quality Scheme (CQS) and the Equity Release Council which are both recognised quality standards for firms in the industry undertaking equity release work.
If you wish to discuss any of the above, please do not hesitate to contact our Residential Property Team on 02392 660261 to discuss your situation and requirements.