Equity Release Guide. Helping you make the right decision. nationwide service all lenders available personal visits.

Transcription

1 Equity Release Guide Helping you make the right decision nationwide service all lenders available personal visits

2 1 Welcome to The Right Equity Release Who are The Right Equity Release? Here at The Right Equity Release we understand you may have many questions about Equity Release, including what it is and how it works. Our aim is to help you understand Equity Release and advise you. Helping you to make the right choice for you and your family. We are Independent, therefore one of our trained Financial Advisors will research the whole market place and advise you on all of the options available to you. We have more than 17 years of experience specialising in Equity Release and pride ourselves on offering you our specialised knowledge, along with great customer service. If you would like to know how much you can raise as a cash lump sum or have regular cash draw downs from your home, then this guide will help answer some of the questions you may have. Contents Page What is Equity Release? 2 Are you Eligible? 2 The types of Equity Release 3 How much can you borrow? 4 Equity Release can be used for... 4 Why choose The Right Equity Release? 5 Safeguards 6

3 What is Equity Release? Equity Release schemes are a way for homeowners aged 55 years or over to release tax free cash from their home without having to move out of it. The Equity in your home is its current market value less any debt secured against it, please see our example. The cash released is Tax Free and can be released as a lump sum, or Drawdown as and when required. You are able to release the money from your property and you choose whether you wish to make any repayments or not. Once any mortgage (if applicable) is paid off, the cash released can be spent as you wish. If you choose a Lifetime Mortgage, you make no monthly repayments for the lifetime of the loan or you can choose a loan to make payments to stop the interest accruing. Are you Eligible? What is the Equity in my Home? Mr & Mrs Smith buy a home for 175,000, 20 years ago Mr & Mrs Smith had a mortgage on the property for 150,000 The value of their home has now increased to 325,000 and the outstanding mortgage is 25,000 Mr & Mrs Smith have Equity of 300,000 ( 325,000 less 25,000) 2 With an Equity Release Scheme: The amount which can be released is based on your age or if you are a couple the youngest of you needs to be aged 55 or over. You need to be a homeowner with little or no mortgage secured on your home. Certain providers will offer enhanced terms based on certain medical conditions and certain lifestyle choices e.g. smoking. Other alternatives to consider: Are you eligible to claim any state benefits you are entitled to, but are unaware of. You could sell your current home and downsize to buy a smaller property. Contact your local authority or other organisation to check if you could claim money to pay for home repairs or improvements in the form of grants. Use your existing savings, or sell any existing investments - but consider getting advice before doing so. Trace any private pensions, company pensions or investments you may have lost track of. Ask family or friends for assistance. Please note: Equity Release plans are not suitable for everyone An Equity Release plan will reduce the value of your estate Equity release could affect any current or future entitlements to means tested state benefits An Equity Release Scheme is a complex legal arrangement and expert independent legal advice will always be involved within the agreement process To understand the features and risks, ask for a personalised illustration

4 The Types of Equity Release: Lifetime Mortgage 3 You take out a loan which is secured against the value of your property. You retain the ownership of your home and continue to live in your own home for the rest of your lives. The lifetime mortgage is repaid from the proceeds of the sale of your property on either death or if you need to go into long term care, which ever happens first. All the products offer a fixed rate of interest and which is added to the loan on a monthly or annual basis. Interest Only Mortgage A mortgage loan is secured against the value of your home, you choose to make the interest repayments on a monthly basis and the outstanding balance of the loan does not increase. The interest rate can be discounted or fixed for a set period of time, but will generally then follow the lenders variable rate. A limited number of providers offer a fixed rate for life were you can choose your level of monthly repayment. Lifetime drawdown Mortgage This allows you to take smaller sums over a period of time, therefore only occurring interest on the money when it is released. A pre approved facility is agreed at outset and you can generally borrow further funds without charge up to the maximum agreed limit. Home Reversion Plan You sell all or part of your home to a Home Reversion company. You no longer own your home, or the proportion sold, but continue to live there rent free for as long as you choose. The home is sold on death or earlier vacation, perhaps to a care home and then the percentage of the property you have not sold will be left to you estate. An Equity Release Scheme is a complex legal arrangement and expert independent legal advice will always be involved within the agreement process To understand the features and risks, ask for a personalised illustration. Your home may be repossesses if you do not keep up repayments on your mortgage.

5 How much can I borrow? 4 The maximum amount you can borrow is based on the youngest age. The percentage amounts vary between different Lenders and providers. Home Reversion Plans can release greater amounts. To give you an idea of the maximum amount available visit our website and use our calculator, this will give you an idea of what may be available to you based on your current circumstances. Equity Release can be used for: Home improvements. Increasing retirement income. Holidays. Buying a new car. Helping the family. Pay for an Operation. Inheritance tax planning. Health care. Debt consolidation. Repay existing mortgage. Fund a purchase of a holiday home. Gifting to children to help with property purchase. Supplementing Insufficient Pension Funds. Conservatory.

6 Why The Right Equity Release? 5 We specialise in all Equity Release plans. We research equity release products from the whole of market. We have access to exclusive deals such as significantly lower interest rates than you would receive by going direct to the lender, including free valuations and cash back deals. We come to you - in the comfort of your own home or, if you prefer, can give advice over the telephone No Call Centres, always a fully qualified Advisor. We offer a no sale, no fee advice service. Nationwide service. Fully independent and regulated advice. We always offer plans that are regulated by the Financial Services Authority and follow the SHIP guidelines. If you are looking for someone to take you gently through the choice of equity release plans on offer and to discuss the various advantages and disadvantages of each one, with complete impartiality, The Right Equity Release offer you personal advice in the comfort of your own home, allowing you to benefit from their in-depth knowledge and expertise leading to the right financial decision and financial peace-of-mind. Mr T had approached a Lender direct to raise funds on a lifetime mortgage to cover the wedding costs for his daughter and help towards a deposit on her new home. Fortunately a friend advised him to take a second independent opinion and approached The Right Equity Release. Our specialist Adviser, being able to look at all the Lenders in the market, was able to check he was getting the best rate and terms to meet his personal requirements. With our special deals available we were able to recommend the same Lender but at a reduced interest rate and, at the time, were also able to offer a free valuation saving Mr T initial costs and substantial savings on interest which would have been charged to him over the years.

7 FSA - The Financial Services Authority Safeguards The Financial Services Authority (FSA) regulates Lifetime Mortgages and Home Reversion Schemes, this means there are clear rules on how we treat our customers fairly and ensures that there are full complaints and compensation procedures in place. All lenders and providers are regulated by the financial services authority for the Lifetime Mortgage and Home Reversion Schemes which ensures that you are fully protected. The Right Equity Release are registered in England & Wales No SHIP - Safe Home Income Plan An organisation that has been formed to protect the Equity Release Consumer through a code of conduct. The SHIP code includes: A "no negative equity guarantee" which means that you will never owe more than the value of your home and that the debt dies with you so the payment of any negative equity can not be left to your estate. You will be provided with a SHIP certificate clearly stating the main cost to the householder's assets and estate. The clients legal work will always be performed by the solicitor of his or her choice. The members of SHIP will only provide a fair, simple and complete presentation of their plans. To guarantee your safety The Right Equity Release will only recommend Equity Release Schemes from providers who follow the Safe Home Income Plans code of practice. 6 Before you enter into a lifetime mortgage it is important that you are aware of all of the implications before entering into a plan. An Equity Release Scheme is a complex legal arrangement and expert independent legal advice will always be involved within the agreement process. To understand the features and risks, ask for a personalised illustration. Your home may be repossessed if you do not keep up repayments on your mortgage. For more information on any of the above please see: FSA SHIP (Safe Home Income Plans)

8 Put us to the Test... Call us FREE Today on to see if you qualify. We will talk you through your options. We will advise you how much you can borrow. We will establish if Equity Release is right for you. Head Office: 24 The Lea, Kidderminster, Worcestershire, DY11 6JY The Right Equity Release Ltd which is authorised and regulated by the Financial Services Authority. Registered in England The Right Equity Release does not charge any up front fees. A fixed fee is charged on completion of an equity release plan. This is currently 995, and the Lender or Reversion Company will pay The Right Equity Release a procurement fee (commission) which is retained.