Releasing equity for loft conversionThe most popular way of releasing equity is by securing a life time mortgage, which is a choice for house owners aged 55 or over. You can borrow as much as 60% of the worth of your home and launch the money as one big lump sum or as numerous smaller sized quantities.
Just like a typical mortgage, interest is charged on the quantity you obtain, however unlike a regular home loan you can select not to make monthly repayments and permit the interest to be rolled up, which implies it is contributed to the loan. The loan amount plus the interest added to it is paid back when your home is offered either after your death or because you move into long-lasting property care.
You likewise have the option of “home reversion” where, offered you are at least 60 or 65, you sell part or all of your home to a service provider in return for a money lump sum and the right to continue living in the property rent-free until your death. There’s no interest to pay with home reversion however you will generally get between 20% and 60% of the market value of the portion you offer to the home reversion company. For example, if your home was worth ₤ 200,000 and you offered half of it, you would get between ₤ 20,000 and ₤ 60,000, and not the ₤ 100,000 that the half is worth on the open market. The older you are the more you get.
To choose which alternative is best for you, it would make sense to get advice from an independent monetary adviser who can browse the entire market and who also has a professional equity release certification. You should likewise examine that the adviser you use is on the Financial Conduct