Understanding the types of equity release, and which is best for you

Equity release is an agreement between a homeowner (55+) and a provider that allows the homeowner to unlock any money tied up in their home. This money is tax-free and helps the homeowner to enjoy the retirement that they have worked hard for. If you take out an equity release plan you are still able to carry on living in your home for as long as you like. For many, their home is their greatest asset. Equity release schemes can turn this asset into extra cash at a time when income may be fixed and low. The value of your home minus any outstanding mortgage can be described as your ‘equity’. It allows you to release this cash from your home, which you can then spend on whatever you like. How much cash you can release depends on how old you are, how much your home is worth and if there are any outstanding loans on the property.


Types of Equity Release

Equity Release Lifetime Mortgages have become a highly popular form of equity release over the past few years, prompting many providers to offer a variation of a lifetime mortgage called a drawdown lifetime mortgage which allows you to release equity as and when you need it, rather than taking a lump sum or regular income. For more information about equity release lifetime mortgages please click here.

Equity Release Lifetime Mortgages are very popular ways of releasing equity from property for older people, generally you need to be over the age of 55 to qualify for an equity release lifetime mortgage. You can look at some other equity release options and comparisons here.

There are Three Main Types of Equity Release Lifetime Mortgage: Roll-up Lifetime Mortgages, Drawdown Lifetime Mortgages, and Interest Only Lifetime Mortgages. This allows the borrower to choose if they want a lump sum, monthly instalments, or a mix of both, meaning that there is flexibility to budget for expenses or special events. Ascot will look at your individual situation, what type of equity release would be most suitable and match products which are right for you. You can read more about the different types of equity release lifetime mortgages here.

Equity Release Enhanced Lifetime Mortgages potentially offer the customer more capital to be released from the property, because it is based on your specific health and lifestyle conditions. This means that the amount that you can draw from your mortgage is based on you as an individual, rather than on a check-box age-based list of criteria. This can mean if you are suffering from a serious health concern which makes it likely you will not reach the average life expectancy for a similar person without your condition or illness then you may qualify for an enhanced equity release plan. For more information about enhanced lifetime mortgages.

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