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Experienced Advisors
Our experienced advisers will guide you through the process from start to finish and will explain the options available to you. We will work with you to ensure you and your family fully understand the implications of taking out an Equity Release product. We are also members of the Society of Later Life Advisers (SOLLA) and have many years’ experience in dealing with Equity Release plans.
Independent Service
Capital Financial Services is a long established firm of independent financial advisers based in Northwood Hills, Middlesex. We provide advice to both individuals and companies on all aspects of financial planning, through a long term approach of fully understanding our clients’ needs, wants and aspirations and then prioritising objectives.
As independent advisers, our clients benefit from our being able to offer advice on the broadest range of products and services. This ensures we match the best product or plan to meet your needs and circumstances.
Trusted Service
We are one of the longest established financial advisers in the area and have built up a loyal base of clients over the years. Our business comes from referrals of satisfied clients who recommend us to help their friends and families with honest and impartial advice.
Equity release is typically available to people who are over the age of 55 and have their own home with a significant amount of equity, but don’t have enough money or income for their needs. By releasing equity in the form of a lifetime mortgage or home reversion plan, it enables the individual(s) to remain in their home and raise money for things such as:
To generate a capital lump sum
To provide an additional income
To provide lifetime gifts to relatives
For home improvements
For holiday home purchase
To fund long term care
Where equity release is a suitable solution and you take out a lifetime mortgage or home reversion plan, the money does not usually need to be paid back or the home sold until the last remaining borrower dies or moves into care, although this may not be the case, for example if you make repayments to preserve as much of the inheritable estate as possible.
Whilst there are benefits for people in this situation, equity release isn’t for everyone and the benefits need to be weighed up alongside drawbacks, such as equity release can:
- be expensive
- impact on you being able to claim certain state benefits and your personal tax position
- impact on local authority grants / other grants (i.e. for essential home improvements)
- potentially erode any inheritance passed down to loved ones
Also, there may be alternative options available to you that need to be explored before taking the equity release route, such as consideration of a conventional mortgage as an alternative, moving to a smaller home, using any savings or investments and potentially selling the home and moving into rented accommodation or living with children or other relatives.
Don’t worry as we can help you understand all the features and drawbacks so you can make a fully informed decision.
It is advised that customers seek independent legal advice before entering into a legally binding equity release contract.
EQUITY RELEASE MAY REQUIRE A LIFETIME MORTGAGE OR HOME REVERSION PLAN. TO UNDERSTAND THE FEATURES AND RISKS, ASK FOR A PERSONALISED ILLUSTRATION.
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01923 842 282
When considering a home reversion plan, you should check:
Whether or not you can release equity in several payments or in one lump sum.
The minimum age at which you can take out a home reversion plan.
Some home reversion providers insist that you’re at least 60 or 65 before you can apply.
The percentage of the market value you will receive. This will increase the older you are when you take out the plan but might vary from provider to provider.
You have the right to remain in your property for life or until you need to move to long-term care, provided the property remains your main residence and you abide by the terms and conditions of your contract. (Equity Release Council standard).
With a home reversion, you sell all or part of your home in return for a cash lump sum, a regular income, or both. Your home, or the part of it you sell, now belongs to someone else and cannot be reversed. This means you will not be able to sell it and move to another property. However, as above, you are permitted to carry on living in your home until you die or move to nursing care, paying no or little rent.
What level of maintenance you’ll be expected to carry out and how often your property will be inspected (this could be every few years).
The minimum age at which you can take out a lifetime mortgage is usually 55. The maximum percentage you can borrow is normally up to 60% of the value of your property. How much can be released is dependent on your age and the value of your property.
The percentage typically increases according to your age when you take out the lifetime mortgage, while some providers might offer larger sums to those with certain past or present medical conditions.
Interest rates must be fixed or, if they are variable, there must be a “cap” (upper limit) which is fixed for the life of the loan (Equity Release Council standard). You have the right to remain in your property for life or until you need to move into long-term care, provided the property remains your main residence and you abide by the terms and conditions of your contract.
The product has a “no negative equity guarantee”. This means that when your property is sold, and agents’ and solicitors’ fees have been paid, even if the amount left is not enough to repay the outstanding loan to your provider, neither you nor your estate will be liable to pay any more. You have the right to move to another property subject to the new property being acceptable to your product provider as continuing security for your equity release loan. Different lifetime mortgage providers might have slightly different thresholds.
If you can make repayments, the mortgage will be less costly. However, with a lifetime mortgage where you can make monthly payments, the amount you can repay might be based on your income. Providers will have to check that you can afford these regular payments. Whether you can withdraw the equity you’re releasing in small amounts as and when you need it or whether you have to take it as one lump sum. The advantage of being able to take money out in smaller amounts is that you only pay the interest on the amount you’ve withdrawn. If you can take smaller lump sums, make sure you check if there’s a minimum amount.
The ‘equity’ (or cash) in your home is its market value, minus any mortgage or debt you have against it. Home reversion involves a company buying your home or a part of it. In return you get a cash lump sum or an income.
An equity release expert adviser will assess your needs and help you decide whether equity release is right for you.
Well, that depends on many factors, like the type and value of your home, and your age when you start your plan. It’s likely that the older you are, the more equity (or cash) you can release. If you get a cash lump sum you might decide to invest this yourself to provide an income.
Home Reversion
You’ll usually get between 30% and 60% of the market value of your home depending on the circumstances, because the buyer allows you to carry on living there rent free or for a small rent. You cannot sell it until you die or move into care. The older you are when you start a home reversion plan, the higher the percentage you’ll get of your home’s market value. You get the right to carry on living in the home under a lifetime lease and the terms of the lease will vary depending on which reversion you choose.
Lifetime Mortgages
The percentage you can borrow is typically between 25% - 30%, however, this will depend on your circumstance and how much can be released is dependent on your age and the value of your property. The percentage usually increases according to your age when you take out the lifetime mortgage, while some providers might offer larger sums to those with certain past or present medical conditions.
Interest rates must be fixed or, if they are variable, there must be a “cap” (upper limit) which is fixed for the life of the loan (Equity Release Council standard). You have the right to remain in your property for life or until you need to move into long-term care, provided the property remains your main residence and you abide by the terms and conditions of your contract.
The product has a “no negative equity guarantee”. This means that when your property is sold, and agents’ and solicitors’ fees have been paid, even if the amount left is not enough to repay the outstanding loan to your provider, neither you nor your estate will be liable to pay any more.
With many equity release schemes, the answer is yes. Just be aware that certain conditions may apply and there may be fees to pay.
Lifetime mortgages from an Equity Release Council member come with a ‘no negative equity guarantee’ to protect you – ensuring you never owe more than the value of your home.
With a lifetime mortgage from an Equity Release Council member, you have the right to remain in your home until you die or move into permanent long-term residential care. Only then will your home be sold and the outstanding equity release loan be repaid.
With a home reversion, you sell all or part of your home in return for a cash lump sum, a regular income, or both. Your home, or the part of it you sell, now belongs to someone else. However, you’re allowed to carry on living in it until you die or move out, paying no or very little rent, known as a ‘peppercorn rent’ this could be as little as £1. Depending on your age and medical conditions, you might be able to access more funds.
Usually, equity release loans are repaid when you die or go into permanent long-term care and your home is sold. Any residual value will be available to pass on as an inheritance. Depending on your equity release plan, you may be allowed to make regular repayments of the interest on your loan.
With a Home Reversion Plan, it may be the case that a small rent is payable.
Yes. Equity release is regulated by the Financial Conduct Authority (FCA) – an independent regulatory body which ensures financial products are fair and meet strict standards.
The Equity Release Council (ERC/the Council), a not-for-profit organisation, is the industry body for the equity release sector. It aims to fully represent and facilitate the safe growth of the equity release market by helping to create the conditions which enable the market to develop effectively.
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If you are looking for expert equity release advice to enjoy retirement with peace of mind, talking to us could be the best move you make.