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Equity Release

About Equity Release

Equity Release won’t be right for everyone but for homeowners aged 55 or over it can provide you with a tax efficient regular income, a cash lump sum or a combination of the two. The “equity” in your home is the difference between its value and any debts secured against it, such as a mortgage, Equity Release lets you access some of the money that is tied up in the property without you having to downsize or move home.

What is Equity Release?

Equity Release involves borrowing money against the security of your property and it can affect your entitlement to state benefits and/or state funding for care costs. If you take out an Equity Release you will incur a debt and interest costs. Other more appropriate solutions may be available and professional advice is vital.

WBW Chartered Financial Planners are independent Equity Release specialists. We are pleased to offer any prospective client an exploratory meeting without charge and, in conjunction with our colleagues at WBW Solicitors, we can provide an integrated one stop Equity Release service.

We only recommend arrangements which meet the Standards required by the Equity Release Council. These offer some very important safeguards and protections which some arrangements do not. You will remain the owner of your property for as long as you continue to live there, you cannot be forced to leave the property and regardless of how much the debt increases neither you nor your estate will owe more than the value of the property.

We charge fixed fees which are agreed with you in advance and, unlike some other advisers, we give you back any commission we received from the Equity Release provider. This can sometimes mean that you receive back more than we have charged you.

Different scenarios

It has been a useful solution for our clients in many different scenarios:

  • Repaying debt – usually repaying an interest only or endowment mortgage which is coming to an end where insufficient funds are available to repay the amount due or replacing expensive credit card debts or personal loans at a much lower interest rate.
  • Increasing income – for those who may be struggling to meet mounting living expenses out of a low or fixed income.
  • Maintaining or improving a retirement lifestyle – by funding new cars, caravans, motorhomes and expensive one-off family holidays.
  • Improving and maintaining a property – replacing roofs and windows, redecorating and building an annexe.
  • Funding private medical treatment – in order to avoid a potentially lengthy, painful and lifestyle limiting wait for NHS treatment.
  • Family financial planning – raising funds to help with grandchildren’s education costs, to help family members buy their own property or to give heirs an early inheritance, with the added benefit of seeing them enjoy the money which you don’t get when transferring wealth post-death.
  • Funding care costs – particularly for those who want to receive care in their own home rather than move into a residential care setting.

Most Equity Release arrangements do not require you to make any repayments. Instead interest is added to the sum you borrowed and is “rolled up”. Your debt will increase but there is usually no need to repay it until your death or the point you move into residential care.

Some arrangements will let you pay some or all the monthly interest and this can reduce the overall cost of the loan. Most will let you move home provided your new property meets the lender’s criteria, although if the new property has a lower value, you may have to repay part of the outstanding loan amount.