Equity release – Seek legal guidance before opting to release cash from your property

Stephen Palmer, Rogers and Norton

 

With the equity release market continuing to be one of the fastest growing sectors of the housing and finance market, as the over 55’s seek to free up the money tied up in their property, it is vital that before any decisions are made there is a full understanding of what it actually entails.

Our equity release team in are experiencing a marked rise in the volume of cases that they are dealing with.

As its name suggests, ‘equity’, using part of the value of your home, is ‘released’ to you as a cash payment – either in the form of a lump sum or as a regular income. This can be used for a variety of purposes, from home improvements to helping children onto the housing ladder.

It’s important to be aware that there are other ways to release some of the equity tied up in your property, such as downsizing. It’s best to explore all available options first to ensure that equity release is the right choice for you.

There are two main types of equity release.

  • Lifetime mortgage – money is borrowed against the value of your home. When you die or move into residential care the mortgage is repaid from the sale of your property
  • Home reversion plan – money is released by selling all or part of your home while you continue to live in it. The property is then ‘leased’ back to you either rent-free or on a peppercorn-rent basis. When you die or move into residential care, the reversion company will then take either part or all of your home, according to the terms of the equity release.

There are advantages and disadvantages to both types of scheme so it is important to seek independent financial and legal advice to help you decide which option is right for your personal circumstances.

Entering into an equity release scheme is a legal contract – as your home is probably the most valuable asset you own it is important to ensure that you fully understand any legal documents you sign and that they are all correct and above board.

By using a specialist independent legal firm with a wide experience of equity release – such as Rogers and Norton – you can be assured that your interests are properly looked after.

We will meet with you to talk through what is involved and carefully explain the process in jargon-free terms, so that you fully understand what it is you are committing to and that you are comfortable that you are making the right decision.

Our experienced and knowledgeable Property departments in Norwich and Attleborough have Equity Release specialists who are able to assist in buying and selling homes using equity release to finance the move, or who are transferring an existing scheme to a different property. The process can be complicated, but our team are able to advise and support you through the issues that could arise.

It is important that advice is sought from a financial advisor who is qualified to deal with equity release mortgages, they can help you understand the implications of the loan for both you and your families.

At Rogers & Norton it is our responsibility to advise and support you through the process, to ensure that you have a thorough understanding of what you are undertaking and highlight the legal implications involved. It is important that we ensure that the equity release option is the right route for you and will offer the right benefits for you.

 

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