equity release

What is it? - Equity Release is designed for clients in their mid-50s or older, who own their own homes outright (or have a small mortgage) and need extra cash or income thereby benefiting from the value of their property without having to move out of it.

Essentially there are two types of equity release scheme, Lifetime Mortgage and Home Reversion.

Lifetime mortgages involves taking out a secured loan on the home, as a lump sum or income (or both).

The loan is repaid from the proceeds of the sale of the house upon death or when the property is vacated (perhaps because of the need for care.) The owner of the property, continues to be the owner. The provision of lifetime mortgages is regulated by the FSA.

Home Reversion involves selling all or part of the home to a third party, normally a reversion company or individual.

This means that all or part of the home belongs to someone else. In return is provided a regular income or cash lump sum (or both) with the client continuing to live in the property for as long as they wish. The provision of Home Reversion Schemes is not currently regulated by the FSA.