The Question
I would like to take out equity release as a short-term measure to cover some emergency costs which need settling now. The thing is, I am expecting to come into some money in a year or two so I believe I will be able to make a partial repayment of the equity release loan – although won’t be able to pay it in its entirety.
Could you please explain what options I have – if any – and whether equity release plans come in a standard format or if there are deals where I can make a partial lump sum repayment or even irregular one-off repayments here and there?
I have considered a loan but just cannot face the idea of being ‘in debt’ at 74! It seems to have too many future challenges.
Mark’s Answer
Thank you for your question and at this early stage, I would like to be clear, Equity Release includes either a loan called a flexible Lifetime mortgage where you borrow a lump sum that is secured against your home, or a Home reversion plan where you sell a share of your home in return for a cash lump sum.
With a Lifetime mortgage you can decide if you want to make payments to manage the interest and/or capital on a flexible, ad hoc or regular monthly basis.
As you only need to raise capital on a short-term basis, it is reasonable to rule out a home reversion plan. Unfortunately, you have not disclosed how much capital you need and therefore there could be several options over the short-term, including personal loans, credit cards.
If a lifetime mortgage is suitable for you, there is now a More2Life ZERO ERC lifetime mortgage with no early repayment charges – this may be a solution.
Furthermore, a short-term retirement mortgage for a couple of years may be a good solution for you. However, as you will see the possible solutions that I have suggested involve taking a loan that you may not feel comfortable with.
Therefore, I would recommend is to have a meeting with one of our equity release advisers who will be able to better understand your requirements, and then suggest a solution once they have assessed your situation and if they make a recommendation they will explain all the flexible features which may reassure you.
Rest assured that you will not have to pay for your adviser meeting and their assessment of your options, as we only charge a fee should you accept their recommendation and your plan completes.
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
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