Is Equity Release Good or Bad The Complete Guide

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EPILOGUE

• Due to bad reputation in the 1980s and early
  1990s when unethical lenders arranged expensive
  deals which lead people owing more than the value
  of their home, lifetime mortgages quite rightly
  got a bad name. But because of our new strictly
  regulated Financial Conduct Authority age, things
  have changed extremely meaning lifetime mortgages
  are very safe and in fact increasingly being seen
  for some as a valuable tool for making retirement
  more comfortable and relaxing.

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FCA STANDARDS

• There must be fixed interest rates or if
  variable, there must be an upper limit or cap
  that is fixed for the lifetime of the loan.
• You need to stay in the property for life or
  until you move into care, just so long as you
  abide by the terms and conditions of your
  lifetime loan.
• You have the right to move to another property as
  long as your provider is happy that the new
  property offers continued security on your equity
  loan.
• The lifetime mortgage must come with the all
  important No negative equity

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PROS

• You receive a tax free lump sum money to spend as
  you wish.
• You can live in your home for the rest of your
  life.
• You (may) continue to have full ownership of your
  home.
• You benefit from any increase in the value of
  your property.
• You will never owe more than the value of the
  property.

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CONS

• Equity release interest rates tend to be higher.
• The money owed can increase quickly as you pay
  interest on the interest accrued.
• Early repayment charges may apply if you repay
  early.
• Your entitlement to state benefits may be
  affected.
• It will reduce the value of your estate,
  affecting any inheritance you wish to leave for
  family.

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