Lifetime Mortgages 

Equity Release 

There are two types of Equity Release - A Lifetime Mortgage, or a Home Reversion Plan. Equity release is a way for homeowners aged 55 or over to release funds from their home free of tax. There's no need to move and there's no need to sell your home, but it can play an important role in helping you to take control of your later life finances. The safeguards that are built into equity release plans also allow you to access safely some of your property wealth without having to worry about making monthly repayments if you don’t want to. 
 

TAX-FREE MONEY 

The money you unlock through equity release is all tax-free and can be spent in many ways. This might be repaying your existing mortgage? It could be supporting loved ones when they need it most? Or you could simply be looking to boost your retirement finances? No matter your reason, equity release could help you live the later life you want. 
 
Equity release refers to a financial product that allows homeowners to access the equity in their property by taking out a loan against the value of the home. This loan can be used for any purpose, and is typically repaid when the homeowner dies or moves out of the property permanently. 

EQUITY RELEASE OPTIONS 

There are two main types of equity release options: Lifetime Mortgages and Home Reversion Plans. 
 

LIFETIME MORTGAGES 

A lifetime mortgage is a type of equity release product that allows homeowners to access the equity in their property by taking out a loan against the value of their home. The loan does not require any monthly repayments, and the interest is typically added to the loan balance, which is then repaid when the homeowner dies or moves out of the property permanently. There is also the option to make overpayments if you choose to, and these can be regular or more as and when, depending on your individual circumstances. The amount of money that can be borrowed with a lifetime mortgage depends on several factors, including the value of the property, the age of the homeowner, and the type of lifetime mortgage product chosen. 
 
HOW DOES IT WORK? 
 
You can release tax-free cash from your home by releasing equity with a lifetime mortgage, the most popular form of equity release. With an Equity Release lifetime mortgage, you don’t have to make any monthly repayments. Instead, the interest with your lifetime mortgage is added to the loan - known as compound interest. The loan plus interest is then repaid when the plan comes to an end, which is usually when you, or the last remaining borrower, either passes away or enters long-term care. Typically, your house will then be sold and the equity release provider will take their money from the sale proceeds. The remainder goes to you or your estate. Typically there are 2 types of lifetime mortgage: Lump Sum Lifetime Mortgage and Drawdown Lifetime Mortgage. 
 
Lump sum Lifetime mortgage 
 
A lump sum lifetime mortgage is a loan secured against your home, giving you access to a one-off pot of cash and you’ll still own your own property. 
 
Drawdown Lifetime mortgage 
 
A drawdown lifetime mortgage lets you draw down cash in stages after an initial lump sum, and you only pay interest on the money released. This is ideal if you know you'll require further funds in the future but do not require at the outset. 
 
How much can you release? 
 
The amount you can release is based on your age, general health and lifestyle and the value of your property. Talk to us today to find out more around how much you can borrow. 
 
Is equity release safe? 
 
Equity release is regulated by the Financial Conduct Authority (FCA) whose primary role is to protect customers and enhance the financial markets integrity. We're authorised and regulated by the FCA, ensuring all our processes and recommendations are clear, fair and not misleading to customers. 
 
No negative equity guarantee 
 
All of the plans we recommend come with several assurances, including the no negative equity guarantee. With it, you’ll never owe more than your home’s worth. So, any debt you accrue through equity release can’t be passed on to your loved ones after you’ve gone. 
 
It's important to note that taking out an equity release mortgage will reduce the value of the homeowner's estate and may affect their eligibility for means-tested benefits. It is advisable to seek financial advice before taking out an equity release mortgage to make sure that it is the right option for you and your family. 

HOME REVERSION PLANS 

A Home Reversion Plan is a type of equity release product that allows homeowners to access the equity in their property by selling a portion of the home to a third party, such as an equity release provider.  
 
 
In exchange for selling a portion of the property, the homeowner receives a lump sum or a regular income. The homeowner retains the right to live in the property for the rest of their life. Although not as popular as Lifetime Mortgages, these plans can sometimes allow you to borrow more than Lifetime Mortgage options. 
 
The amount of money that can be received through a Home Reversion Plan depends on several factors, including the value of the property, the age of the homeowner, and the percentage of the property being sold. Typically, the older the homeowner and the more valuable the property, the more money can be released. 
 
LESLIE JAMES LIFETIME MORTGAGES DO NOT PROVIDE ADVICE ON HOME REVERSION PLANS. 
 
 
 

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