Equity Release

Equity release can be a confusing issue - here we answer some of the most popular questions, and give you the best advice on how to deal with this aspect of your UK home mortgage.

Are there any restrictions if I want to release my home's equity?

Lenders generally only consider homeowners who are over sixty years of age.

How much can I borrow?

This can vary depending on which company you take out the policy with. Apart from the value of your home, your age and gender are the main factors used to calculate the maximum amount you can borrow. For instance, you will receive less the younger you are and, because women have a higher life expectancy than men, women tend to receive less.

See our home equity loan calculator page for a detailed explanation on how the amount is calculated.

Are there any risks to home equity loans?

Yes. There is a possibility that you will eventually owe more than the house is worth, especially if there is a sharp increase in interest rates. If you are concerned about this, think about taking out a fixed interest loan that guarantees that the amount you owe will never exceed the value of the house.

Do I need to get any advice before opting for a home equity release scheme?

Yes. You need to be absolutely sure of how this loan is going to affect your finances so seek professional advice. The extra income you are gaining from the loan may affect any state benefits you currently receive, so it is highly recommended that you discuss all of these matters with your financial adviser.
Click here to view our Home Equity Loans Directory

How will the loan affect my will?

A home equity loan will have a major impact on the assets you leave to your loved-ones for their inheritance. You should contact your solicitor to review your will, and you may also want to discuss the details with your family.

© AskFinancially.com 2008

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