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Specialist Independent Financial Advisers

Established 1981

WE ADVISE TO A PROFESSIONAL STANDARD IN SPECIALIST AREAS WHICH INCLUDE:

EQUITY RELEASE

WHAT IS IT?

Equity release is a means of extracting cash from the value of your home.  You retain the right to live in your home until you die (or move into care) and you make no repayments until your house is eventually sold.

The Institutions providing the cash receive no return on their money until your home is sold.

Sound too good to be true?

Maybe.  But equity release is undoubtedly a most expensive way of raising cash.  Which is why, in the market place generally, the bold statement is always:

“EQUITY RELEASE SHOULD BE REGARDED AS A LAST RESORT”

A greater degree of flexibility might be more appropriate.  Equity release may help with Inheritance Tax planning.  And what about those human, eager desires?

Is it not your money?  Then pandering to your comforts must surely be acceptable?  That extra bottle of gin each week or the odd world cruise or two . . .

BUT, because of the high cost it is imperative:

1. You understand fully all the implications.
2. You explore every possible alternative.

We regard professional guidance in this area as absolutely essential.

HOW DOES IT WORK?

There are two main schemes: REVERSION or LIFETIME MORTGAGE.

Under Reversion schemes you effectively sell all or part of your home in return for tax free cash.  But don’t imagine that if you sell 60%, the cash you receive will be 60% of the current value of your home.  It won’t be.

Under Lifetime Mortgage schemes you are granted a tax free loan against the security of your home.  But although you make no repayments until the house is sold (normally on death or moving into care), interest is charged but not collected.  It is ‘rolled-up’.  This means you end up paying not only interest on the loan but interest on interest.  The cumulative effect can be devastating.

THE DIFFERENCE BETWEEN THESE TWO SCHEMES

• With Reversion schemes there is certainty.  If you sell 60% of your home you know your beneficiaries will receive 40% of the sale proceeds no matter when this occurs.
  
  
• With Lifetime Mortgage schemes if you die in the early years of the Plan your beneficiaries will be better off than under a Reversion scheme.  (Know your date of death?!)  This is because the amount of the rolled-up interest increases (dramatically) as the years go by.  You can reach a stage of Negative Equity.  In a nutshell this means the sale proceeds are insufficient to cover the repayment required.

All the above indicates that decisions about equity release are not easy. That is why it makes sense to send for the Porter Brown guide on the subject.
Act now. Simply complete the form below.