Equity Release

Why not release the money tied up
in your home with Equity Release?

STARTLING STATISTICS FOR THOSE OF US IN LATER LIFE

• Adult children provide elderly parents with 36 hours of unpaid care each month, at a total annual cost of £39 billion.

• The price of caring for an elderly parent stands at £132,500.

• The ‘sandwich generation’ spend £5.9bn each year supporting both their own elderly parents and their own older children.

• In April 2008 that from £38,000 in a base rate tracking account you could expect around £158.00 a month. Today that same account would be paying you just £16.00 each month.

• The rate of inflation for the over 50’s is more than double that the headline figures you see published in the papers

The reality is that the current economic climate means that many more people now need to look to find extra cash to meet their day to day living expenses. And with house prices now much lower than they were 18 months ago it is natural for people to consider whether staying put is in fact the right answer. Problem is how to get hold of the extra cash that is needed without moving to a smaller or less expensive property, and in the current climate there are the associated problems of actually being able to sell a property.

It is worth talking to a well qualified financial adviser who can help talk you through the options that are open to you. As a qualified specialist adviser I will be able to work with you to understand your income and outgoings. I will also look at the state benefits you receive and check that you are getting everything you are entitled to. I will then take you through the options including helping you to consider whether it is worth you considering taking some of the cash out of the value of your house without moving.

There are various ways you can access the cash you need without moving.

Lifetime mortgage: A loan secured on the property with the interest rolled up to be paid back on death or if you go into residential long term care. As with a home reversion scheme you are guaranteed to be able to stay in your home until going into long term care or earlier death Drawdown or Flexible Lifetime Mortgage: A lifetime mortgage with a pre-agreed maximum loan from which the client can withdraw amounts when required. Home reversion: A company buys a share of your home in return for a lump sum or regular income. You then have the right to stay in your home until you either go into permanent residential long term care or earlier death. Home income plan: A Lifetime Mortgage which is used to buy a lifetime income, or annuity. Interest payments are taken from this income and the original loan amount is paid back from the final sale. Interest-only mortgage: A lump sum loan against the value of the home, repaid from the proceeds of the sale. Interest on the mortgage is paid monthly. Sale and Rentback Scheme: A company buys your property. You can then remain in the property provided you meet the terms of the rental agreement you agree with the landlord.

For those facing the difficulty of funding care costs it is really worth considering whether an equity release scheme can help as the money could give you or your parents the opportunity to stay in your own home.

It has been revealed that UK adult children will provide their elderly parents with the equivalent of £39 billion in unpaid care this year. The 2009 LV ‘Cost of a Parent’ report also highlights the financial and emotional pressures that the ‘sandwich generation’ in the UK face during the recession, as they anticipate rising care costs and weakening finances, should their parents or in-laws need professional care.

However, as Mike Rogers, LV's Chief Executive, pointed out. “Releasing equity from an elderly parent’s home can provide relief from the burden of financing care, and increases the options for elderly people to plan ahead. An appropriate equity release product with full family support and understanding could also potentially enable an elderly parent to have alterations made to their home to enable them to live independently for longer. It is important though that people take appropriate independent financial and legal advice before taking these steps.

“Releasing a sum of £26,000 from a property could help fund four years’ worth of home care, with a carer visiting for two hours each day to help with domestic tasks and personal care. This could be invaluable if this kind of professional care is required and it makes better economic as well as emotional sense, compared with the alternative of selling the property to help fund the care.”

Of course if you are managing to pay your way now with your day to day expenses, you could also raise money to get more enjoyment from your retirement and perhaps do the things you've always wanted to do but couldn't afford.

It cannot be stressed sufficiently that before going ahead with an equity release scheme it is important to get advice from a fully qualified adviser. In fact all the product providers who are members of SHIP the trade body which looks to make sure equity release schemes are safe for consumers insist on you taking advice before you go ahead.

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Releasing equity from your home may reduce your right to state benefits both now and in the future, and will reduce your estate on death. You may also not be able to release additional money from your home in the future.

 

Your home may be repossessed if you do not keep up repayments on your mortgage.

A fee of £500 is payable at completion of the transaction for our advice, research and administration service. This is for lifetime mortgage and home reversion schemes only.

David S Lowe Financial Management is authorised and regulated by the Financial Services Authority and is entered on the FSA register (www.fsa.gov.uk/register/) under reference 458258.

The FSA do not regulate some forms of Mortgages and Equity Release.

For advice on any of the above, Contact Us now.

West Yorkshire Equity Release in Huddersfield, Halifax, Leeds, Bradford, Wakefield