But how does it work, and which are the best schemes? Be aware of how these charges are paid. Ideally, now would be the time to use equity release to provide 24 hr care if they could stay in they home or sell and move to the retirement village. Chris Torney If you sign up for equity release, it is inevitable that at least some of the value of your home will have to go to repay the provider when you die or move into care. Equity release is a means of retaining use of a house or other object which has capital value, while also obtaining a lump sum or a steady stream of income, using the value of the house.. More and more often we are hear the term “equity release” as an option to ease financial woes or taking money out of a home without having to move… but what actually is equity release. The minimum age to be accepted in to an equity release scheme is 55, although this can vary according to the provider. I would also visit a number of different providers. It can be used to pay off expensive debt, such as for a car, secured loans or even the mortgage. Equity release is, in a nutshell, a way to unlock the value of your property and turn it into a cash lump sum. Please get in touch, equity release|downsizing|family finance|inheritance|buying & selling|letting|property abroad|mortgages|property maintenance. Equity release is a way for people over 60 to get at the cash locked in the value of their homes. This means you and your family will not benefit from future house-price rises on the portion you have sold. Unlock Some Of The Value In Your Home With A Tax Free Lump Sum Using Our Free Equity Release Calculator. With equity release, there’s no need to move. These are the most significant pros and cons: Taking money out of your home via an equity release scheme is often seen as an alternative to downsizing – selling your current property, moving to a smaller, less expensive one, and using the difference in price (less moving expenses) to bolster your pension income. In general, you don’t repay the money unlocked by equity release or the interest on it until you move into long-term care or die. It’s important to weigh up the advantages and disadvantages of equity release. Basically, equity release is letting you gain access to cash that is tied up within your home. You can do this via a number of policies which let you access – or 'release' – the equity (cash) tied up in your home, if you're 55+. This means that if something unexpected happens and your property is sold for less than the amount that you owe, your estate won’t have to make up the shortfall. If you do take one out, you should consider checking to see if you can get a better deal once the early-repayment charge period has ended. There are only two main types of schemes: lifetime mortgages and home reversions. But signing up for an equity release deal is a significant commitment, and it is important to do your homework in advance to ensure you know how the scheme works and whether it is right for you. The main disadvantage of equity release is that it does not pay you the full market value for your home. Equity release has come a long way since the 1980s and ’90s when cowboy lenders flogged plans that cost far more than the value of the property and wiped out people’s entire estates. Of course, the debt is settled when the house is sold, but as a result – not much might be left over for your family. How to downsize with minimal fuss. Large cash deposits can be used for gifting to children which can help them put a deposit on a new home and start on the. 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