Choosing the right equity plan is essential to make sure you receive the finances you want and don’t have any leftover debt or repayments to make. There are a range of equity plans available and you should always consider several factors before choosing your plan.
Essex Equity Release can discuss all specifications of each equity release plan to ensure you make the right decision. We always provide a personal service to give you the advice you need.
Are You Eligible?
The first thing you must consider is whether you are actually eligible to release equity from your property. You must be a homeowner aged between 55-95, as well as having a property worth a minimum of £70,000. Some plans may have certain criteria which means you cannot be over a certain age or your property must be worth a certain amount of money, which you must adhere with if you want this plan.
Our team will always discuss each individual plan you are interested in and the criteria you must meet to choose this plan. Every company you work with will check eligibility which could also involve health checks, so this is always something you should think about before wanting to release equity.
Choosing Your Funding Option
When releasing equity, there are two funding options you can choose from. These are lifetime mortgages and home reversions. Lifetime mortgages allow you to take out a loan against the value of your property, similar to a normal property mortgage, whereas, home reversions means you sell part of your property to a third party. If you choose home reversions, you will not retain sole ownership of the property like you will with lifetime mortgages.
This is the big difference between the two equity options as, whichever plan you decide, repayment does not have to be made until you have moved out of the property and it can be sold. This means the plan will only come to an end when you and your partner pass away or move into long term care.
If you choose to sell your home early, early repayment will be required unless your criteria allows you to change plans or properties.
Repayment, Debt & Inheritance
For many homeowners, you will want to leave children or grandchildren with inheritance and no debt whatsoever. Thankfully, with our equity plans, you will always receive a no negative equity guarantee, ensuring your repayment never amounts to more than your property value. Therefore, repayments can always be made with no risk of debt.
As repayment is only required when you and your partner pass away or move into long term care, this should never be an issue for homeowners. Many equity plans also allow you to leave an inheritance and protect a certain value from our property so regardless of your repayment amount, inheritance will always be available.
Interest Rates & Changing Plans
Another factor to consider when choosing equity release plans is the interest rates of your plan and whether you will be able to switch plans or properties. The interest rate on your equity plan may not be up to scratch with some of the latest plans that offer a better interest rate.
By choosing a plan with criteria allowing you to switch properties or plans, you retain full control of your property and lifestyle and can always find the best possible equity plan for your needs. This also means in the future, you could find yourself an even better equity plan so when repayment is made, you are left with a lot more money.
If you would like more advice regarding equity release plans or would like to discuss our plans, contact Essex Equity Release today. We can provide a fast response and always discuss your specifications to ensure you select the right plan. Call us today on 01268 799211 or fill in our contact form to make an enquiry.