The Question
Please could you advise on whether I would be permitted to take an equity release plan?
I am 79 and my husband is 78. We own a bungalow in Polegate, East Sussex and we think it is worth £350,000 to £400,000.
We would like to obtain in the region of £150,000 to use for home improvements and supporting our living costs. Thank you.
Mark’s Answer
You are very welcome, and I am happy to provide you with some general information regarding equity release.
Firstly, there are two different options with equity release including a Home Reversion Plan and a Lifetime mortgage. Furthermore, you may be eligible for a Retirement Mortgage or a Retirement Interest Only Mortgage (RIO).
With these different options available, our equity release advisers who are whole of market, and independent, will assess your circumstances and make a bespoke recommendation based on your requirements.
However, to confirm that based on the value of your home, and your ages, you are eligible for a flexible Lifetime mortgage, and you can borrow up to 49% of the value of your home.
So based on your conservative property valuation of £350,000 this would mean you could access £171,500. We have a range of equity release calculators to help you work on different property values to assist.
We would only suggest taking an initial amount to cover your immediate expenses on the improvements planned for two reasons. Firstly the lower the loan-to-value you take, the lower the interest rates tend to be. Secondly, taking a lower amount initially can result in a cash drawdown facility which will give you access to additional funds in the future. This will result in less interest being charged by the lender over the longer term.
Furthermore, the amount you borrow could increase depending on your health, as some providers increase the available capital if you have current health conditions. However, a Lifetime mortgage has flexible features, which our experts will explain to you, and you can read about them on our website at www.equityreleasesupermarket.com/what-is-equity-release.
For example, you and your husband could borrow enough capital to complete your home improvements and support your lifestyle over the short-term, and then drawdown further capital in the future from a cash reserve facility to support your lifestyle in the future and the benefit of this option is that you only borrow capital when required.
Therefore, as you have many options, the best place to start is to take advice without obligation, and our friendly expert advisers are only a phone call on 0800 802 1051, or feel free to use our LiveChat facility.
Meet our expert…
Mark Gregory, founder and CEO of Equity Release Supermarket, is here to answer your questions. Mark is an adviser himself with over 20 years equity release experience.
He launched Equity Release Supermarket 10 years ago and it has grown to become one of the UK’s leading equity release specialists.
Email kate.saines@emap.com to ask Mark a question
