Equity Release is a means of using the value of your home to receive either regular monthly instalments or a lump sum of cash. In all instances, age is the primary factor. This determines the percentage of the value of your home that can be released.
An older person can release a higher percentage of the value of their home than a younger person. This is as they would have a longer life expectancy. There is no maximum age limit for equity release. However, applicants under the age of 60 are not normally successful.
If you have children, consider letting them know what you are doing. This will prevent any nasty surprises when it comes time to pass on your estate.
There are two types of equity release schemes, these are lifetime and home reversion. With a lifetime policy, you normally get a tax free lump sum which is then secured on your property. There are no monthly repayments, all interest is compiled then paid when the property is sold on in the event of your death.
With a home reversion plan the same as lifetime you get a tax free lump sum. However, in this case, it is done by you selling all or part of your home to the lender. The lender will then get it’s share back in the event of your death.