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Equity Release Plans and Benefits – Do you qualify?
In order to qualify for an Equity Release Plan you need to be a homeowner in the UK and be over 55 or if a couple the youngest of you needs to be at least 55.
If you own your own home and wish to release some of the equity from within your property you can under an Equity Release scheme. There are 3 main types of Equity Release:
1. Lifetime mortgage
2. Interest only mortgage
3. Home Reversion*
*Generally to benefit from a Home Reversion Plan you have to be over the age of 65.
Deciding on the right scheme to benefit you is where taking Specialist Independent Advice is imperative. A trained experienced advisor will spend time with you in the comfort of your home understanding what you are trying to achieve.
There are so many varieties under the different schemes available, taking advice now will mean you get it right first time. Undoing your chosen option in the future because it was not the right plan in the first place can prove costly as there are early repayment charges, further valuation fees, solicitor fees and application fees which will all make changing to the right plan costly.
Generally there is no medical underwriting under an Equity Release Plan and no income checks as the loan is based on age and your property’s valuation. There is, however, a Lender in the market place who will offer enhanced terms based on certain medical conditions. The Specialist Advisor will ask you questions in order to ascertain if you qualify, of which you may be offered a higher loan than under an ordinary Lifetime Mortgage.
A Draw down Plan is perfect for clients who are in receipt of certain means tested benefits such as council tax benefit, pension credit and savings tax credit. These benefits can be lost or reduced if you keep too much money in savings. Releasing the money in stages through draw down plans allow you to borrow the same amount over time than if you borrowed a large lump sum but without affecting your benefits. Our Specialist Advisors will carry out a state benefit check on every client to ascertain whether you are entitled to State Benefits and how they would be affected based on your chosen loan. They will then advise you and potentially change the advice based on not affecting your current future benefit position.
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