You can find several equity release providers out there, and they are willing to give you an amount of money you need to be provided based on your property. There are different qualifications based on the equity release provider. Here are the most common questions, and the responses that will help you decide if you should get this loan.
Q: Who can qualify for this loan?
A: There are two considerations to qualify for this loan- the age of the person who owns the property, and the age of the youngest person on the title deeds. For lifetime mortgages, the minimum age is 55, while it is 65 for home reversion.
Q: How much should you withdraw?
A: You need to decide how much you will borrow depending on what you intend to use your money for. Regardless of the purpose, make sure that the amount will not increase over time if you calculate the interest rate. The best advice is to avoid borrowing lump-sum amounts unless necessary. You can borrow a small amount that will cover your needs for a few years and take a rest before borrowing again.
Q: When is the right time to borrow?
A: If you are of the right age, you can start processing your documents for application. You can speak with your chosen equity provider to clarify the information you read online or provided to you by someone you know. It also helps if you talk with consultants for over 55 equity release. They know a lot about the details of equity release, and they will help you make a sound decision. You can’t borrow money right away without a clear understanding of all aspects.
Q: Who determines what the value of the property is?
A: Usually, an independent valuer will come to survey the property to determine its value. The report will be available to you and the lender. You will then borrow money which is only a portion of the total amount of the property.
Q: What happens to those who die or decide to move to senior care?
A: If you die or you decide to move to a senior care facility, your estate needs to contact the equity release provider. At that point, there will be a discussion on how to repay the loan, which is usually the sale of the property. The estate receives the amount with the deduction of the loan and its interest.
Q: Who owns the property?
A: For a lifetime mortgage, you remain the full owner of the property. You can stay in your house rent-free until you die. You also need to be responsible for making sure that it is in excellent condition. However, for home reversion, you are no longer the owner. The ownership depends on how much you sell to the home reversion company. You can still stay, and not pay rent, but you are not in full control of the property anymore.
Now that you have responses to some of the most pressing questions related to equity release, it is time to decide if you will pursue this transaction.