Frequently asked questions
Equity release is essentially like lending someone your property (or a piece of it). You take money in exchange for it and pay that back once you no longer own it.
You don’t need to worry about negative equity using a Lifetime Mortgage, as they have a ‘no negative equity guarantee’. Whereas Home Reversion is best used later in life, when you have no intention of paying off a mortgage or interest.
If you are using a Lifetime Mortgage equity release, you can sell and move home, taking the mortgage with you or paying it off. With Home Reversion, you cannot move, as the reversion company now owns part of your property.
The best thing to do is to find a legal expert who knows about equity release, to make sure it’s the right choice for you and your family. They can help ensure that you qualify, that it’s in your best interest and that you’re getting the best deal.
With a Lifetime Mortgage you need to consider whether you’ll pay back a monthly fee to cover the interest, or let it build up and be aware of whether the interest is variable or fixed. While Home Reversion limits you from moving unless you are going into a care facility.
In order to apply for equity release, you’ll need both legal and financial advice, which could cost around £1000, depending on the complexity of the case. Your solicitor is there to ensure you fully understand the product and the conditions it comes with. A financial advisor is there to confirm it won’t leave you in a negative financial situation.
