MORTGAGES
Equity Release
At Roxburgh Financial Services, we specialise in guiding homeowners through the intricacies of unlocking the financial potential within their homes via equity release. This financial strategy presents a valuable opportunity for those aiming to enhance their financial flexibility by accessing the cash value tied up in their property.
Essence of equity release
Equity release is a mechanism that allows homeowners aged 55 and above to convert part of their home’s value into cash. This can be an attractive option for supplementing retirement income, facilitating mortgage payoffs, or funding renovations to enhance your living space.
Lifetime mortgage
One of the primary forms of equity release is the lifetime mortgage. It allows you to borrow against your property while retaining ownership. You can choose whether to pay the interest or allow it to roll up, with the loan itself being repaid through the sale of your property when you pass away or move into long-term care.
Home reversion plans
Home reversion plans offer an alternative route involving the sale of part or all of your property to a reversion provider in exchange for a lump sum or regular payments. This option permits you to remain in your home for life while ensuring you have the necessary funds for your needs. Upon your departure or move to long-term care, the house is sold, and the proceeds are split according to the respective shares owned.
Enhanced lifetime mortgage
For those with certain health conditions, the enhanced lifetime mortgage offers tailored terms that could increase the amount of equity you can release. This is determined through a detailed assessment of your health and lifestyle, ensuring the solution is customised to your specific situation.
An equity release mortgage grants you a tax-free lump sum in exchange for a portion of your property’s future sale proceeds. Unlike traditional mortgages, this option does not require monthly repayments, offering a stress-free solution to accessing the wealth tied up in your home for various personal requirements.
Remortgaging: A flexible solution
For homeowners seeking to access additional funds, remortgaging presents a flexible option. This process involves replacing your current mortgage with a new one, potentially allowing you to borrow a more significant amount while keeping your monthly repayments manageable. An advantage of remortgaging is its accessibility to homeowners of all ages, providing a viable alternative to equity release without age restrictions. It’s advisable to consider this route as you near the end of your current mortgage term to avoid early repayment charges and maximise your financial options.
Secured Loans: Leveraging your assets
Secured or homeowner loans offer another pathway by utilising the value locked in your assets as collateral. While these are typically secured against your home, they can also be backed by other valuable possessions like vehicles, which meet a minimum valuation criterion. Opting for a secured loan involves a commitment to meet monthly repayments, as failure to do so could risk the lender taking possession of the collateralised asset. This method serves as an effective means to release funds from your property or other high-value assets under specific conditions.
Equity Transfer: Joint ownership strategies
Equity transfer offers a strategic option for those under 55 in joint ownership scenarios with an older co-owner. This approach involves transferring your share of the property to the co-owner, enabling them to apply for equity release independently. It’s important to proceed cautiously, as this method involves potential liabilities such as Land and Buildings Transaction Tax payments and legal fees, depending on the transferred amount. The risks associated with equity transfer, especially in non-marital joint ownerships, such as loss of property share or obligations following the co-owner’s death, necessitate careful consideration and legal counsel.
Ready to find out how to unlock your financial freedom and well being?
Obtaining professional advice is paramount to ensure you fully understand the implications of your decision. Unlocking the financial potential of your property if you are 55 or over can provide significant opportunities to enhance your financial well being.
Speak to a Roxburgh Financial Services team member today for a consultation to explore how we can help you maximise your property’s financial potential.