More Flexible Stock Release Plans Could Benefit You | Personal Finances | Finance
Freeing up equity helps homeowners aged 55 or over unlock the tax-free money tied up in their home, from a minimum of Â£ 10,000 up to 58% of their property’s value. After increasing popularity over the past decade, borrowers now enjoy a greater choice of plans and greater flexibility in stock release products as the market becomes more competitive.
Equity release plan options
There are plans that allow you to unlock your money on a monthly basis, much like receiving a salary in your bank each month. Alternatively, you can unlock a lump sum and then additional smaller amounts as you need them.
You can choose to make regular repayments
In the past, stock release proceeds pooled the interest and the loan, and they were only repaid after you were taken care of or by your estate upon your death. Borrowers can now make voluntary or partial repayments, typically up to 10% of the remaining value each year, meaning that the amount of interest and overall debt owed is reduced.
No monthly repayment
One of the main reasons people decide to free up equity is that there is no obligation to make monthly repayments if you choose not to.
Plus, with a lifetime mortgage, you continue to own 100 percent of your home, and you can spend your money once you’ve paid off any existing mortgages you may have.
Prepayment charges are more manageable
Previously, equity release plans had a high prepayment charge (ERC) of up to 25% of the amount borrowed. Nowadays, most offer defined ERCs which generally decrease on a sliding scale, for example by 10% in the first year and 9% in the second.
Moving is possible
You are no longer required to stay in the property where you have purchased an equity release plan if you wish to move. Equity release plans now offer a portability option to transfer the loan to a new property if it meets a lender’s criteria.
Is the release of equity right for me?
In order to release equity, the youngest homeowner must be at least 55 years old and your home must be worth at least Â£ 70,000.
While it is true that freeing up equity can eat away at an inheritance, you can also restrict a portion of your property’s equity to be protected. This is called an âestate protection guaranteeâ.
A specialist stock release broker, such as Age Partnership, will tell you everything you need to know about the effect on the amount of inheritance you can leave and whether your entitlement to means-tested benefits might be. affected now or in the future.
As the # 1 stock release broker in the UK *, they can provide a free stock release quote outlining what the stock release could mean for you. You don’t have to go with everything that is recommended to you.
Only if you choose to continue and your case is complete, a typical fee of Â£ 1,795 will be payable.
What is it about ?
The equity release can involve a home reversion plan or a lifetime mortgage, which is secured by your property. To understand the features and risks, request a custom illustration.
While no monthly repayments are required with the release of equity, any money released, plus accrued interest, would be refunded in the event of death or move into a long-term care facility.
The equity release can involve a reversion of the house or a lifetime mortgage, which is secured by your property. To understand the features and risks, request a custom illustration. The release of equity requires the repayment of any existing mortgage. Any money released, plus accrued interest, would be refunded in the event of death or move into a long-term care facility.
Correct at time of publication. Age Partnership Limited is authorized and regulated by the Financial Conduct Authority. FCA registration number 425432. Company registered in England and Wales under number 5265969. Company address: Age Partnership Limited, 2200 Century Way, Thorpe Park, Leeds, LS15 8ZB. VAT number 162 9355 92.