The term ‘Equity Release’ is a form of later life mortgage that is aimed at homeowners who are over the age of 55 and have a property worth at least £70,000.
You may look into the option of selling your house because you are moving in family or are not looking at buying another property. There are some consequences for taking this route, however, it is still possible to do. It’s key to speak to your advisor to go through what your plans are and see whether or not they line up with what’s currently in place for you in order to do that.
To understand the features and risks, ask for a personalised illustration.
A lifetime mortgage may impact the value of your estate and it could affect your entitlement to current and future means tested benefits. The loan plus accrued interest will repayable upon death or moving into long term care.
We have had a question come in for you, Dan.
Which is ‘can I sell my house if I've taken out equity release?’
Yes, you absolutely can. If you sell a house to move in with family or sell a house so that you don't buy another one, depending on when you do that and what the lender's terms and conditions are. There may be some penalties, but you can always do it.
So, the thing to do would be to speak to your adviser and go through what your plans are and make sure that that's in place to enable you to do that.
One of the key safeguards are lenders whose plans are compliant with the equity release council safeguards and standards, is that you can port your mortgage to another property, as long as that property fits with the lender's criteria. So, generally speaking, they're looking for a standard construction property.
They wouldn't be willing to port it to a property abroad. If you wanted to move to Spain, they wouldn't consider something like a park home or something like that.
But yes, if it's another standard property, in most cases, you can move your lifetime mortgage onto that.
Sometimes, there may be a timescale involved. The most common timescale with lenders is five years and there's various levels of downsizing protection, some of which exempts you from early repayment charges. and lets you do that.
Importantly, for couples in particular, a lot of lenders have a safeguard in place that if something happens to one of you, if you were to die or to go into long term care, then in a lot of cases, the survivor has three years to repay the mortgage, to move property, or with no early repayment charges.
So, at that time when there's a lot of trauma and upheaval in someone's life, they don't need to worry about the potential for penalties. If they want to reassess what they're doing sell property and move on.
Brilliant, that's been helpful. Thank you.