1. What qualifying criteria apply to an Equity Release programme?
If you are 55 years or under, and a property owner.
2. What charges apply to an Equity Release programme?
There are a number of fees involved, such as the following: Arrangement fee; Legal costs; Valuation fee; Insurance; Rental charge and Early Repayment should you pay off a lifetime mortgage.
Many of these charges may be added to the loan and do not have to be paid in cash.
3. Would negative equity to affect our property?
We’re a member of Safe Home Income Plans (SHIP) and this offer an Equity Release schemes with a no negative-equity guarantee, which means your property’s value will never exceed that of the mortgage.
4. I want my spouse to stay in the property upon my death.
This is possible if you took out the scheme in both your names.
5. Will I forfeit my property?
In some instances, yes, you may lose your property; however, if your plan is a SHIP one, you may be able to keep it. Those unable to pay the interest on a lifetime mortgage or the rent on a home reversion may risk losing the property.
6. Do I have alternatives to a Home Equity Release Scheme?
Some financial institutions could offer you loans or interest only mortgages, but be careful that the repayments do not affect your expenses too much.
7. What happens to the property after my death?
A representative would sell the property and repay the loan and interest to the lender. A specialist lender would be able to sell the property even after it has remained unsold for a certain period, which may be anything from 6-18 months.
8. Reversion plans
Companies with 100% control over a property, get a provider to sell it. Those with less than 100% arrange the sale themselves. Your estate would receive the original amount agreed upon, minus the sale costs. Some split the sale costs with your representatives, and this would be in the same proportion as the original sale. Others may charge you all the fees.
9. Who is responsible for the property’s maintenance?
You are responsible for this, and failing to do so may mean the company will do repairs and add that to the loan’s cost.
10. I might move home soon. Would that be allowed?
Most lenders do not mind transferring a home equity plan; however, moving to a lower priced property might mean a repayment to the lender’s scheme. This would normally be taken from the sale of the property.
11. Do I qualify for an Equity Release Scheme if I have a mortgage?
Depending on some conditions, this may not be as tricky as it seems. Some providers may still accept you, but you would have to repay the mortgage. This does reduce the amount of cash, though you’ll no longer have to make monthly payments.
12. How do I cancel my Home Equity Release Scheme?
Lifetime mortgages may be paid off, though some lenders may add certain charges. Ask about this before entering into a scheme. Home reversion schemes, however, can not be cancelled.
13. Does a change in my marital status affect the Home Equity Release Scheme?
It is advisable that the new spouse joins to the scheme, as some Schemes allow him or her to live in the property after your death.