If you – or a loved one – are finding everyday tasks difficult, equity release could help you pay for the support you need to stay in the home you love. Equity release can be used to pay for home or domiciliary care, nursing care or live-in care. But it’s a big decision, so it’s important to get expert advice from specialists who will talk you through the pros and cons to help you decide if it’s for you.
The following information is provided by one of Autumna’s trustedpartners, 55Plus Equity Release, who have been providing specialist equity release advice for the over 55s since 2006. Award-winning and independent, 55Plus Equity Release always act in their clients’ best interests – they will only recommend equity release if they think it’s a good solution for your personal circumstances.
55Plus Equity Release is a member of the Equity Release Council, which means they abide by its strict code of conduct.
The information presented here is generic. If you’d like to understand more about whether equity release could be a viable option to help you pay for home, domiciliary, nursing or live-in care, one of the 55Plus Equity Release expert advisers will be happy to offer you an initial, no-obligation consultation. You can arrange this by calling 0800 023 9155 or by clicking here.
Equity refers to the wealth tied up in your home – both the money you have invested in it and any increase in value. Equity release schemes for the over 55s free up some of that equity for you to enjoy now. The most common reasons for choosing equity release include paying for improvements to age-proof your home (such as walk-in showers and stair lifts), helping with everyday bills and paying for care so you can carry on living in your own home.
There are many reasons for wanting to stay in your own home, rather than moving into a residential or nursing home. But if you – or mum or dad – are beginning to struggle a bit, you may need support to enable you to continue living independently in the home you love.
The Money Advice Service advises that home care will cost an average of £14,000 a year, for 14 hours of care a week; you could pay less than this – or considerably more – depending upon where you live and how much help you need. Depending upon your personal circumstances, you may get some help towards these costs, but most people have to pay a significant amount themselves.
If you don’t have sufficient savings to pay for the care you need to continue living independently, equity release could provide a financial solution.
There are two types of equity release.
If you opt for a lifetime mortgage, you borrow a sum of cash against the value of your home, just like a conventional mortgage. Interest is charged each month and rolled up; you can opt to draw down your loan in chunks, as you need it, to reduce the amount of interest that accrues. You do not have to repay anything until the plan ends, which is normally either if you leave your home because you move into a care home, you move home (for example to move nearer to a relative or to a more manageable property) or at the end of your lifetime.
The alternative is a home reversion plan, in which you sell a percentage of your home (up to 99%), in exchange for a lump sum. You can stay in your property for life, or until you wish to sell it, at which point the lender will reclaim their percentage of the price at which your house is sold.
With both types of equity release schemes, you can stay in your home for as long as you like. Equity release products that are offered by members of the Equity Release Council come with a ‘no negative equity’ guarantee, which means you or your estate will never owe more than the value of your house.
There are pros and cons to both lifetime mortgages and home reversion plans, as well as lots of different product features (such as guarantees, flexibility, plan costs and early repayment charges); an equity release adviser will be able to explain them to you and help you decide which is appropriate for your personal circumstances.
If you own your own home (or a second property) and you are at least 55 years old, you may well qualify. Lenders won’t lend against all properties, however new products are coming onto the market all the time, so even if you have failed to qualify for equity release before, it can be worth exploring as there may be a new product for which your property meets the criteria. For example, over the last couple of years, equity release products have been released enabling people to borrow against former council houses, thatched properties and homes that are used for bed and breakfast.
Two key factors affect this: your age and the value of your property. Some equity release plans also consider your health – you may be able to borrow more if you are a smoker or have pre-existing health conditions.
If you don’t need to borrow the full amount that a provider is willing to lend you, given the value of your property and your age, you may be offered a lower rate of interest.
If you wanted to move home – for example to be nearer to relatives or to move to a house that is easier to maintain – most plans would allow you to do that. Make sure to discuss the options that you are considering for the longer-term so your equity release adviser can look for products that offer the flexibility you need.
Equity release plans are complicated financial products – so they are heavily regulated. Moreover, plans that are associated with the Equity Release Council have to offer high safety standards. These include:
All plans set up on a joint basis continue until the surviving partner dies, moves into permanent, long-term care or chooses to move. Some plans allow the survivor to repay the plan without penalty on first death or entry into long-term care within a period after the relevant event.
This is your decision, but it’s a complex one and it will have implications for your estate so we therefore encourage you to involve your loved ones so they can help you make the decision that feels right for you. 55Plus Equity Release advisers are happy to include your relatives at all stages of the process.
Yes – equity release is a complex subject and it is not the right solution for financing in-home care in all situations. You need to work with an honest, expert adviser who will take time to consider your personal circumstances, help you decide whether equity release is a good solution for you, guide you through the options and scour the market to find a product that matches your needs.
55Plus Equity Release have expert advisers around the country who will be happy to visit you (respecting current social distancing and Covid-19-secure guidelines) to understand your circumstances and explore whether equity release might be an appropriate solution for you to pay for home care, nursing care, domiciliary care or live-in care.
If it is a suitable solution for you, they will guide you through the entire process, making sure you understand every stage of the process. As an independent firm, they can access nearly all of the market, meaning they can explore a wide range of options to find a plan that matches your particular needs.
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