Equity Release is where you raise money to spend on whatever you want and use your home as security. You do not need to make any payments and any interest due is added to the amount you owe; however, you can pay the interest each month if you wish.
Typically, people use Equity Release to raise money for things like topping up your income or Home improvements or to replace their car, some people just want to help other family members for things like deposits for a first home or university costs, others use it to provide a fund to use for holidays or just to make retirement a little more comfortable in retirement.
Equity Release could help raise money for the following life stages:
Retirement is a new chapter for many people, where they have the time to tick a few things off the “bucket list” that they didn’t get chance to earlier in life. For many retirees, this means a well-earned holiday. In fact, it’s the millennials that need to keep up; over-55s are now more likely to travel abroad solo than any other age group. A lifetime mortgage can help retirees achieve their travel goals, or just take the dream family holiday they’ve always talked about.
The Bank of Mum and Dad
With house deposits in the UK now averaging at £33,127, first-time buyers need the help of Mum and Dad more than ever. In fact, more than a third (34%) of buyers rely on financial help from their families to purchase their first home. The Bank of Mum and Dad in 2019 was the 11th largest mortgage lender in the UK. Using a lifetime mortgage, your clients can release the equity they need to help family members pull together a deposit or secure lower mortgage payments. The money could also be used to help furnish their new home, or pay towards solicitors fees or removal costs.
Pay off an Interest Only Mortgage
Many interest only mortgages were sold to people between 2000 and 2008 before the financial crisis. With an interest-only mortgage, your monthly payment pays only the interest charges on your loan, not any of the original capital borrowed. This means your payments will be less than on a repayment mortgage, but at the end of the term you’ll still owe the original amount you borrowed from the lender. Equity release is a way to pay off the original amount owing.
It’s often called “the happiest day of your life” – but it can also be the most expensive. In 2019, the average estimated wedding cost was a daunting £30,000. To help children start this new chapter of life with as little stress as possible, parents could take out a lifetime mortgage to help finance the big day. The money released could help book a dream venue, buy the perfect dress, or put on a reception to remember.
The Silver Separators
The latest figures show divorce rates are decreasing in every age group except the over 60’s. And it’s not cheap – the average cost of legal fees in divorce is between £17,000 and £30,000. Typically, divorce isn’t something you can plan ahead for, and it can leave a lot of couples under financial pressure. Two-thirds of couples who split end up worse off, and more than a quarter resort to selling the family home. A lifetime mortgage could help relieve the financial burden and emotional strain by releasing equity. It could also mean that one party could stay in the family home and avoid stamp duty and removal costs .
How we can help
The advisers at Money Matters FS Ltd have been arranging Equity Release for over 25 years and Money Matters FS Ltd are Weymouth & Portland’s local equity release specialists but also advise and arrange Equity Release throughout the whole of the UK. Our fully qualified and experienced Equity Release advisers will help you understand whether equity release is right for you and then recommend which equity release scheme is the most suitable one for you and your circumstances.
Our expert team can help you to understand Equity Release. There are many myths about Equity Release so in our experience, the best way forward for such a complex and sensitive subject is to speak to one of our advisers who will be able to explain Equity Release in full, consider all your options and answer any questions that you have.