Equity Release For Over 50s

Over 55s are increasingly turning to equity release for over 50s  as a way to unlock the tax-free cash locked up in their homes. But if you’re considering this option, it’s crucial to take independent financial advice. An IFA will be able to help you understand the risks and benefits, as well as alternative options that could work better for you.

Research by SunLife shows nearly a third of people over 50 wrongly think their children will have to repay the lump sum they release from their home, while two fifths also believe they could lose their house as a result of taking out an equity release plan. However, the regulated products offered today are designed to ensure that you can never go into negative equity and your children will never be liable for repayment.

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The most popular type of equity release is a lifetime mortgage, where you release a lump sum or regular payments from the value of your property while retaining full ownership. You’ll be responsible for paying any bills and maintaining the property, but you’ll not need to pay back your equity release provider until after your death or if you move into long-term care.

There are other forms of equity release, such as home reversion schemes where you sell a proportion of your home to a company that gives you a monthly payment in return. However, these can often prove expensive as a percentage of your home’s value is being used to cover fees.

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