Can your property wealth help you?


10th May 2020 Property

Can your property wealth help you?

As routines continue to be disrupted, many UK homeowners might start seeing their homes in a new light. Not only is your home your sanctuary at this time of crisis, but it is also likely to be your biggest asset and potentially a financial lifeline.

Coronavirus has impacted different people in different ways. Some are experiencing financial strain or looking for ways to help loved ones, while others are looking to focus on the future and make good on those long-awaited plans. 

Whatever your priorities, your property wealth could help you achieve your goals.

If you're a homeowner aged 55 and over, you could be eligible to take advantage of your property wealth and unlock tax-free cash from your home.

The UK’s most popular way to release equity is with a specialist mortgage, known as a Lifetime mortgage. Unlike other forms of equity release, a lifetime mortgage is simply a tax-free loan secured against your home with no fixed end date.

You could release a portion of your home’s value as a tax-free cash lump sum to boost disposable income, clear an existing mortgage, help loved ones financially or make those desired home renovations.

What are the benefits?

With a lifetime mortgage, there are no required monthly payments for you to make. If you use the cash to clear your existing mortgage you could become repayment free. With your budget free from regular repayments, the boost in your disposable income could help you put your money where it is needed most, whether that is toward supplementing your pension income or improving your quality of life.

As there are no required monthly payments, the interest is added to the mortgage, with the full amount not being due for repayment until you have either passed away or entered permanent long-term care. At this point, your estate can pay the mortgage through the sale of your home or with other means if it is available to them. If you do wish to manage the build-up of the interest, though, some lifetime mortgages allow you to make regular voluntary payments, payments which can stop at any time.

With a lifetime mortgage, you are not selling your home. You remain the sole owner of your home, with the lender simply registering a charge on the property, as with a traditional mortgage.

If you would like to learn what your property wealth could do for your finances, why not see how much you could release from your home today, using our free online calculator, or call the UK Information Team on 01752 424 436 to find out more.

Things to consider:

Releasing equity may reduce the value of your estate and could affect your entitlement to means-tested benefits. Reader’s Digest Equity Release can provide you with a personalised illustration so that you can see exactly how your lifetime mortgage could affect your estate over time.

A Lifetime Mortgage may impact the value of your estate and could affect your entitlement to means-tested benefits. Think carefully before securing other debts against your home. To understand the features and risks ask for a personalised illustration. Reader's Digest Equity Release is a trading style of Responsible Life Limited. Responsible Life Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (https://register.fca.org.uk/) under reference 610205. Only if you choose to proceed and your case completes will Responsible Life Limited charge an advice fee, currently not exceeding £1,490. Our adviser will talk through the setting up costs of a Lifetime Mortgage before you make any decision to proceed.

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