- Will I still own my own home?
- Will I lose my home?
- Who is the Equity Release Council?
- Can I still leave an inheritance?
- Am I able to end the plan early?
- Can I still take out an equity release plan if I have an outstanding mortgage?
- Can I change my equity release plan?
- What happens if I decide to move into long term care?
- Am I able to move house if I have released cash from my home?
Will I still own my own home?
If you take out a lifetime mortgage you will remain the owner of your home. However, if you take out a home reversion plan, a percentage of your property will be owned by the home reversion company who you sold your house to in order to release the cash from your property. All of these plans, however, allow you to remain in your property until you and your partner pass away or move into long term care.
Will I lose my home?
Taking out an equity release plan is a big decision, and making sure you release cash safely is extremely important.
Equity release advice and plans are fully regulated by the Financial Services Authority (FSA), ensuring that customers who take out an equity release plan are protected throughout the whole process. At Key, for your extra safety, we also recommend Equity Release Council approved equity release plans. All of these plans allow you to remain in your property until you and your partner pass away or move into long term care.
Who is the Equity Release Council?
The Equity Release Council is an organisation which promotes safe equity release plans. An Equity Release Council approved plan means you get total peace of mind through their safety guarantees:
- You have the right to remain in your home for as long as you choose.
- The freedom to move to another property without financial penalty (subject to criteria).
- A ‘no negative equity’ guarantee, so you never owe more than the value of your home.
The Equity Release Council’s code of conduct requires that customers must take professional advice. At Key, we think it’s important that this advice is completely independent and not tied to any particular equity release provider. As well as searching the whole of the market, we’ll give you straight forward and clear advice, even telling you if equity release isn’t right for you.
Can I still leave an inheritance?
All equity release plans will reduce the amount you leave as an inheritance; however there are plans available which allow you to guarantee an inheritance to your loved ones when the plan comes to an end.
For example, if you take out a home reversion plan and sell less than the full value of your home, you will be able to guarantee this part of the property as an inheritance to your family from the sale of the property. This percentage will be paid at the end of the plan when you and your partner pass away or move into long-term care.
Am I able to end the plan early?
An equity release plan is intended to last for the rest of your life; however there are ways in which you can repay the plan back early. If you take out a home reversion plan, you can buy back the reversion company’s share of the property, but you will have to pay the full market value for the percentage of the property that you sold. This will be more than the amount you received when you originally sold your house to the provider.
If you have taken out a lifetime mortgage and wish to repay earlier than planned, you will have to pay off the full amount, including the loan and interest accumulated. There may be an early repayment charge. You should check this before you proceed with any type of plan.
Can I still take out an equity release plan if I have an outstanding mortgage?
Yes. Equity release providers allow you to release cash from your home if you have an outstanding mortgage on your property, however all providers would expect you to use the cash you release to pay off the outstanding mortgage owed first.
Can I change my equity release plan?
If you have already taken out an equity release plan then you may be eligible to change to a more competitive plan. Read more about switching your equity release plan to see whether you are eligible.
You may even be able to release more cash if your home has increased in value.
What happens if I decide to move into long-term care?
If you move out of the property into a care home, the equity release plan will come to an end, meaning your house will be sold and the debt will be repaid in full to your equity release provider. If you are a couple and only one of you moves into care, your partner can remain in your home until they pass away or move into long term care too.
If you live in your home and receive domiciliary care, then the equity release plan will continue, allowing you to remain in your home until you pass away.
Am I able to move house if I have released cash from my home?
Yes. Key recommends plans that are approved by the Equity Release Council which allow you to move home if you wish. The move is subject to provider criteria, which can differ between providers.
*Key Customer Care Questionnaire – Aug 2012.
This is an equity release plan. To understand the features and risks ask for a personalised illustration.