Equity Release Solicitors
Equity release can be a good way of tapping into your property wealth to raise funds for retirement or other plans, or to pay for care. Releasing equity from your home can be a great option, however, a great deal of consideration needs to be taken first.
Our conveyancing solicitors regularly advise homeowners considering equity release across the UK from our offices in Bedminster, Bishopston, Bristol city centre, Kingswood and Thornbury. Our expert team will advise you on the legal implications and the options available to you, and guide you through the process of releasing equity from your home.
What is equity release?
Equity release allows homeowners over the age of 55 to release some of the equity (value) that is tied up in their house, whilst continuing to live there. It can be a lump cash sum or in instalments.
To be eligible for equity release, the property must be located in the UK and be your main dwelling. It should also be in good repair.
How does equity release work?
There are two types of equity release plans:
Lifetime mortgage
A lifetime mortgage enables you to take out a loan (like a mortgage) against your home whilst continuing to live there. You do not have to repay the amount borrowed and any accrued interest until you die and your home is sold or you move into long-term care.
You may have the option to make repayments at any time or let the interest roll up. Your loved ones can choose to pay off the mortgage once you pass away or move into care. Because of this, and also that funds released are not taxable, a lifetime mortgage is a popular way of securing inheritance for family and friends.
Interest rates for lifetime mortgages are usually higher than regular mortgages. The interest for the loan also compounds over time, so the loan will end up being significantly more than the amount borrowed. It is therefore very important to take financial advice, and this is usually provided by an equity release broker.
If the property ends up being worth less than the outstanding loan, neither you nor your loved ones will have to pay the difference.
Home reversion plans
A home reversion plan is where you sell part or all of your property (between 25% and 100%) to a specialist provider in return for a lump sum or regular payments, whilst continuing to live there.
When you sell part or all of the home, it then belongs to the home reversion provider, however, you can ring-fence a percentage of your home to use as inheritance by only selling part of the property.
With a home reversion plan, your provider will not take any money out of your home until it is sold (once you pass away or move into long-term care). Like with a lifetime mortgage, you nor your loved ones will have to pay back more than the value of your home.
Is equity release a good idea?
If you are eligible for equity release and you are considering retirement or planning for the future, equity release can be a great option. Many people release equity to help adult children buy their first home, make home improvements or even pay off debt.
The benefit of lifetime mortgages and home reversion plans is that any cash you get is tax-free and you won’t end up in negative equity, giving you and your loved ones peace of mind. If you choose a portable plan, you can also move house.
As with any type of loan, there are negatives, however. The money you receive from equity release may affect your entitlement to state benefits and impact any inheritance you pass to loved ones. With both types of plans, you will have to pay arrangement fees of £1,500 to £3,000 (these may vary) and there may be an early repayment charge if you change your mind.
Equity release can also be a complicated process and the decision to take capital from your property shouldn’t be taken lightly. If you are considering this type of loan, it is important to contact a specialist equity release solicitor who can talk you through the options available and the legal process. It is also a good idea to discuss your plans with an independent financial adviser who can make you aware of both the risks and benefits before going ahead.
Blog | Why choose equity release?
Why choose Barcan+Kirby’s equity release solicitors?
Our conveyancing solicitors have proven expertise in advising homeowners in Bristol and across the UK on equity release. Our expert team has a wealth of experience in a wide range of residential conveyancing matters, from equity release and transfer of equity to shared ownership, buy-to-let investments and buying a new build.
Our equity release solicitors are members of the Law Society’s Conveyancing Quality Scheme (CQS), reflecting the high standard of service we offer. We provide a friendly, safe and reliable service that protects your interests, taking the stress out of the process of releasing equity.
Equity release FAQs
Equity release normally takes around six to 12 weeks to complete, however, this does vary. Your conveyancer will be able to keep you updated on timescales throughout the process.
If you wish to sell your house after you have released equity, it depends on the terms of your loan.
If you have a lifetime mortgage and you wish to sell your home to move into care or with a loved one, you can usually do so and repay the loan at any time, however, you may be asked to pay an early repayment fee. If you are selling your home and buying another, you may be able to transfer the lifetime mortgage to the new property.
With home reversion plans, if you have sold part of your home to the provider, you are unlikely to be able to sell the remaining portion unless you are moving into long-term care.
Equity release is normally only available to homeowners over the age of 55, but this depends on the lender. Some lenders will also cap eligibility at 79 years old, so it is important to check this when considering your loan type and provider.
Get in touch with our equity release solicitors in Bristol
If you are considering releasing equity from your home and need help with a lifetime mortgage or home reversion plan, our expert equity release solicitors can help. Contact our Conveyancing team on 0117 325 2929 or fill out our online enquiry form.