When you’re thinking about taking out equity release
it’s important you understand the ins and outs. The easiest way to do that is by asking our specialist equity release advisers questions during your appointments.
They’ll always be happy to answer any queries you, or those important to you have. And to give you an idea of what others in your position ask most regularly, here are seven frequently asked questions as revealed by our equity release advisers.
- Will I have to make repayments/Can I repay the loan?
- Will my children ever owe any money?
- Can I release more money in the future?
- Will I still own my home?
- Will there be any money left for my children?
- What do my family do when I pass away?
Will I have to make repayments/Can I repay the loan?
With any equity release plan, there are typically no monthly repayments for you to make.
A lifetime mortgage
, the most popular form of equity release, is a loan secured against your home. However, unlike a standard mortgage, the loan, plus roll-up interest, is repaid when your plan comes to an end. This is usually when you or the last remaining applicant either passes away or enters long-term care.
With a lifetime mortgage, your equity release adviser can personalise your plan to include features which allow you to repay the loan early, either on a regular or ad-hoc basis.
If that’s something that interests you, make sure you tell your equity release adviser.
Will my children ever owe any money?
No, as long as your plan is approved by the Equity Release Council (ERC).
The ERC is the industry body for the UK equity release sector, and all of their approved plans come with several assurances, including the no negative equity guarantee.
The no negative equity guarantee means that you can never owe more than your home’s worth. So, as long as your plan is approved by the ERC, you’ll never be able to pass on debt to your children through equity release.
Plans we offer are approved by the ERC and include the no negative equity guarantee.
Can I release more money in the future?
Depending on which equity release plan you choose will decide whether you can unlock more money from your home in the future after your first withdrawal.
A drawdown lifetime mortgage
allows you to take an initial lump sum while keeping some of your total release amount back to draw on later down the line should you need it.
By doing this, you can often reduce the overall cost of your equity release plan, as you’re only charged interest on the money you release.
If you decide to take a lump sum lifetime mortgage or opt for a home reversion scheme, you can choose to submit more than one equity release application – providing there is enough value left in your home.
Will I still own my home?
Yes, you will with a lifetime mortgage.
As a lifetime mortgage is a loan secured against your property – much like a standard mortgage – you’ll still retain full ownership.
Will there be any money left for my children?
With a lifetime mortgage, your equity release adviser can personalise your plan to include inheritance protection.
With it, you can ring-fence a percentage of your home’s future value to be passed on as a guaranteed inheritance, meaning you can enjoy your tax-free cash now and rest assured those important to you will have something to inherit when you pass away.
With a home reversion scheme, you sell all or some of your home to a reversion company for less than market value. So, whatever you don’t sell is yours to bequeath.
Can I move home?
Yes, as long as your plan is approved by the ERC.
One of their assurances is that you can always move home after taking out equity release.
If your new property is approved by the lender, your equity release plan will simply be transferred to your new home.
If it’s not, you can pay your loan back early, and if you choose to include downsizing protection in your equity release plan, you can do so without any early repayment charges.
What do my family do when I pass away?
It’s the executor of your will’s responsibility to make the lender aware that you’ve passed away and to repay the loan on your behalf.
Usually, this is done by the sale of your property, but it’s up to them how they raise the funds.
Lenders will typically give your executor between 6-12 months to repay the loan.
We imagine you may have more questions about equity release if you’re thinking about going ahead.
Our website is full of helpful information about equity release; what it is, what it means for you and your family and how the process works.
But if you’d prefer to try another way, you can download our free guide.
- Download your free guide
- Find out all you need to know about equity release as well as how we could help you transform your life for the better
Alternatively, book an appointment with one of our expert equity release specialists to find out whether equity release is right for you.
We’ve helped more than 1 million people decide if equity release is right for them. And if it’s not right for you, we’ll always tell you.
Things to consider
- Speak to us
- Fill in our callback form to speak to one of our fully-qualified equity release specialists
Our independent, specialist equity release advisers compare products from the whole of the market to find the most suitable equity release plan for you. They’ll discuss the options available to you and explain that taking an equity release plan reduces the value of your estate and may affect any means-tested benefits you’re eligible for.
You have to get expert advice before releasing equity; it’s a regulatory requirement. Key’s initial consultation is free with no obligation to proceed. If you decide to go ahead with an equity release plan, our advice fee – usually 1.99% of the amount released, subject to a minimum of £1,499 – is payable only on completion.