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Equity Release is a means of using the value of your home to
receive either a lump sum of cash or regular monthly instalments.
There are two types of equity release:
In both instances, age is the primary factor in determining
the percentage of the value of your home that can be released.
A person of an older age can release a higher percentage of
the value of their home, than a person of a younger age, as they
are not expected to live as long.
There is no maximum age limit for equity release, although applications
are not usually granted for anyone under the age of sixty.
Important factors to consider:
• Equity release is not regulated by the government.
• When choosing an equity release plan, ensure that it has
negative equity guarantee. This means that in the event of the
value of your property decreasing, the debt will also decrease,
in addition, this will ensure that any outstanding debt, after
the sale of your property will not be passed on to your next of
kin.
• Not all lenders will allow you to move home after you
have taken out an equity release plan.
• If you are living with a partner, you must take out a
joint plan to ensure that the debt will only be reclaimed after
the death, or admittance into long term care, of the last surviving
partner.
• There can be hidden charges, such as; legal fees (as a
solicitor is needed to set up the equity release plan), you will
be charged for the surveying of your property. There are also
charges for the setting up, maintenance and redemption of the
loan.
• You retain full ownership of your home until your death
or admittance into long term care.
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