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Mark Gregory, Founder and CEO at Equity Release Supermarket
www.equityreleasesupermarket.com
Tel: 0800 802 1051
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Question
What are the criteria for equity release?
My wife and I are considering taking some of the equity from our home to provide our children with a bit of extra cash to help them on the property ladder.
However, I am not sure if we are eligible as it looks to be a retirement option and my wife and I are both still in employment. We are both 63 and we own our house outright.
Answer
Thank you for your question, and like all of our customers, you will have your own unique personal circumstances. As you are both 63, and you own your house outright, you are eligible for Lifetime Mortgages, Home Reversion Plans and Retirement Interest-only Mortgages which are all associated with later life capital raising.
However, dependant on the amount of capital you need, a short-term unsecured solution may also be more suitable, as you may be able to afford structured repayments. At this stage of your research, it is important that you have a clear understanding of the options available to you for raising capital to help your children with ‘a bit of extra cash’.
As there are a number of options available to you, I would suggest you discuss your plans with one of our friendly, fully-qualified advisers, who will be able to explain all your options in detail, and provide a bespoke solution based on your personal circumstances.
This personal advice is provided without obligation, and our whole of market experts will not charge you for a consultation and their advice. You would only pay an advice fee, when any recommended plan completes, and you would not be committed to any fees during the initial advice process.
Therefore, you have nothing to lose for a friendly personal consultation and receiving a bespoke solution.
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Question
Inheritance tax and equity release
Please can you explain the inheritance tax rules which apply to equity release? I am a widow, considering a lifetime mortgage so I can help my son financially.
However, I am concerned if I die within seven years my son will be liable for a big tax bill on any money I gift him from the house.
Answer
Here at Equity Release Supermarket, we are specialist whole of market, fully independent equity release specialists.
The whole team including our head office support staff specialise with equity release and we aim to provide all our customers with a 5* bespoke service. However, we are not inheritance tax specialists, though I do have a broad understanding regarding the seven-year rule.
I can confirm that you are able to make a gift of money, property, or other assets to become exempt from inheritance tax (IHT) if the person giving it lives for seven years afterwards.
This is a fundamental concept for any person planning to pass on wealth to the next generation, particularly if their estate exceeds the current IHT threshold.
Lifetime mortgages are often used to provide a ‘living inheritance’ to pass wealth down to the next generation at a time when they need it most, regardless of whether or not the estate is likely to be subject to inheritance tax on the eventual death of the client or their spouse.
This strategy can be very effective where there may be a future inheritance tax liability and there is scope to make use of potentially exempt transfers, or chargeable lifetime transfers within the clients’ nil rate band.
One of the main benefits of using a lifetime mortgage strategy is that it will release funds that can be used for legacy planning, while at the same time the loan and rolled up interest will create a debt which will reduce the taxable value of the estate.
At this stage, I would suggest that you discuss your plans with one of our equity release specialists, who would assess your requirements, including how much you are looking to gift, and the size of your estate.
Following the initial consultation their advice may be to consult with an inheritance tax specialist if equity release is a solution for your objectives.
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Question
How do I access face-to-face equity release advice?
I would be grateful for some advice on where I might access the most suitable equity release plan. I understand my local Nationwide branch might be able to help, but I hoped there might be a method for acquiring a broker or financial adviser to assist me in exploring other options
I do not wish to conduct this process using the phone or, indeed, video calling. I would ideally like to meet someone face-to-face. I am happy to travel. I currently reside in the Nottingham area.
Answer
Thank you for your enquiry and you are correct in stating that Nationwide are limited to just one lifetime mortgage product that they can recommend, whereas using an independent broker like Equity Release Supermarket you have access to over 700+ products from the whole of the market.
Equity Release Supermarket has been providing bespoke advice to customers for nearly 15 years. Before I became the CEO, I was an equity release adviser, and I fully understand that customers have their own personal preferences on how they wish to receive advice.
Here at Equity Release Supermarket, I have personally interviewed all of our advisers and they are happy to help customers in the comfort of their homes, over the telephone or via video conferencing. Therefore, if your preference is to receive your advice face-to-face in the comfort of your home, we always have a local adviser who can help you.
At this stage, why not use the ‘Find an Adviser’ function on our website, where you can find your local adviser, and read their bespoke biographies and ‘get to know them’ before you meet them face-to-face.
Furthermore, you can read our 5* Feefo reviews on our website, to understand how our customers benefitted from the unique service we offer.
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Question
Divorce: Can we use equity release?
My husband and I have decided to separate, and we are not sure what to do about our home. The situation is that we bought the house 25 years ago and our three children have grown up there. They are now 27, 25 and 21 – the youngest two still live at home.
As we still have two children at home I would like to keep the house, stay in it with the kids and for my husband to move out and buy another property. To do that, however, we wondered whether he could release equity from the home.
We’d need to release a lump sum of £250k and the house is valued at £850k. We don’t have a mortgage and we are 59 and 61. Thank you.
Answer
Firstly, I am sorry to read that you and your husband have decided to separate, and I expect this is a difficult time for you both as you adapt to the changes with your own personal circumstances.
Here at Equity Release Supermarket, we have helped many customers achieve a solution on separation by using the equity in the family home. Although you have only provided me with brief details about your circumstances, as you are both over 55, and you have a mortgage-free property worth £850,000, lifetime mortgages and retirement interest-only mortgages may be a solution for you both to separate amicably and allow your children to keep living in the family home.
Any financial settlement would need to be addressed legally, and therefore any release of equity would form part of that agreement.
Assuming you are 59 and to retain sole ownership of the property following separation/divorce, you could raise up to 37.2% (£316,200) of the property value on a lifetime mortgage. Therefore, the £250,000 is certainly achievable.
Please bear in mind the less you borrow, the more favourable the interest rates available. Our smartER research tool will help you understand what products and amounts are available to you.
At this time, I would strongly recommend that you discuss your plans and options with one of our friendly, fully qualified equity release, whole of market specialists, without obligation to fully understand your options and choices, based on your individual circumstances. They can talk to you together or separately, face-to-face, over the telephone, or via video conferencing which ever suits your circumstances.
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