Two types of company offer equity release
services. Financial services companies and property companies.
Formal equity release products are offered
by financial services companies to older consumers. The
product being offered is typically a mortgage so it assumes you're
staying put. These products are now regulated and can be a good
"forever" solution if you qualify for them. Essentially these are
low-risk from the consumer's perspective but the payout is often less
than 65% of the value of your property.
With a property company you can sell and move or sell then
rent back your home. These schemes allow you to release equity and are
unregulated at present. Sell and rent back schemes are unlikely, if
ever, to be offered as a permanent solution, and are frequently for a
minimum or fixed term. These schemes are more high risk from the
client's perspective but should provide a higher percentage of your
property's value than a conventional equity release product.
Equity release products go by a variety of
names. You might know them as "equity home release", "equity
house release", "lifetime mortgage" or even "equity
release mortgage". Generally these products are geared to the over
60s although some cater for the over 55s.
It is fair to say that equity release
products are quite controversial. Not to mention complicated. As a
result, your first step should be to find the
best information you can
on equity release services and products.
Can you release
equity in other ways?
Not everyone fits the criteria required
by conventional equity release services. Usually it's because you
are in the wrong age group or your house doesn't meet the valuation
Many homeowners release equity by
refinancing their home. Of course this may leave with you with increased
outgoings but if you don't need to raise significant capital, it could
using a professional property buyer
One option available to you is to sell
and down-size or move to a cheaper area. Here you have two options to
choose from. Sell on the open market or calling on the services of some
type of property company.
Selling your house by conventional
methods through an estate agent is the path most people take. This can take time,
but if you're not in a rush this will be your best option for getting the
best possible price for your house.
Or perhaps you need to release equity
and move but have a strong preference to work to a fixed timetable? In this case a
property company might be the most suitable service provider to contact
because they will guarantee to meet your timetable.
sell and rent back
An alternative to the likes of
home reversion plans for
older homeowners is a "sell and rent back" arrangement with a house buying company /
property investor. This will almost certainly be a cheaper option in
real terms and allow you to remain in your house too. Equity release
services with knobs on. Who should sell and rent back to release equity?
There are many reasons people choose to
sell and rent back to release equity.
divorce or separation. It can happen at any stage in life.
Equity release services can be an ideal
solution for some. But each of us has unique circumstances. It's for
this reason that when we enter into discussions with a vendor about
a sell and rent back arrangement we design a personal, one-off proposal
entirely geared to their needs.
You can find out more about our
flexible sell and rent back arrangements
here or our cash house
here. Alternatively call
us on 0800 043
0669 or complete the form