Raise Money from Your Home with Equity Release

If you are thinking of raising money from your home without having to move out, then one possible solution may be equity release. Usually you have to be in your fifties or older, and the lender may have minimum limits on the borrowing. Most people who opt to release equity get several quotes and valuations before making up their minds.

There are two ways equity release works. You can take out a lifetime mortgage where you raise money with a loan secured on your home. You can get the money as regular income, as a lump sum, or 'draw down' the loan in smaller amounts. The main types are the interest-only mortgage, the repayment mortgage, the home income plan where the loan is invested in an annuity to provide a regular income, and the roll-up mortgage.

Or, you can sell all or part of your home with a home reversion. The prospective lender will value your home and you will get an agreed percentage of the valuation of your home. The percentage you get depends mainly on how old you are, i.e., how long the lender expects you to continue staying in your home. This will then be available to you as a lump sum from the sale, or the lump sum may be invested to provide an income. Unlike the lifetime mortgage, this is not a loan and you cannot cancel the deal after you have made the sale. Independent valuations are usually sought and because whichever method you choose will affect you and your beneficiaries, professional advice is usually sought before proceeding.