Lisa had always dreamt of being a published author. She was a financial expert and worked in the banking sector for twenty years. After retirement, though, all Lisa wanted was to make her dreams come true. After working in the financial world for more than a decade, she knew a lot about the equity release mortgage. So, she got her financial advisor, as required by the Financial Conduct Authority1 (FCA) and Equity Release Council (ERC), to help out with the process and get the cash she needed to get her books into the market.
Understanding Equity Release
Equity release is a mortgage scheme that allows you to untie the equity tied up in your home. You receive the tax-free capital in the form of a lump-sum2 or as a monthly income. Typically, the plan consists of two schemes, the lifetime mortgage plan and the home reversion plan. The lifetime mortgage is the most popular and allows you to continue living in your home until you move out permanently or pass away. In this plan, you pay the total loan you received plus any interests accrued overtime.
With the home reversion plan, however, you sell a portion, or your entire estate to the plan provider, of which when you move into residential care or die, the lender puts up their house for sale and takes their share of the estate. The remaining proceeds go to your family. Unlike with the lifetime mortgage plan, in this scheme, there are no accrued interests.
Taking out a home reversion plan also means that you receive a pre-arranged amount of cash to spend as you wish, in return for selling the part (or all) of your estate to your lender. The money you receive is discounted since you continue to reside in your home as long as you want.
It also enables homeowners to raise a more considerable sum of cash as compared to the lifetime mortgage plan. You also get the chance to ring-fence3 a portion of your estate for inheritance purposes and benefit from your share of ownership when there are increases in the estate market value.
Lisa chose the home reversion plan since it best suited her needs. After consulting her adviser and with her vast knowledge about equity release and other mortgage plans, she opted to go with Bridgewater Equity Release company, who helped her get the best home reversion deals.
Bridgewater is one of the best equity release companies. It’s a subsidiary of Grainger PLC, the most popular home reversion plans specialists of residential property in the UK. Moreover, since Lisa lived in Wales, Bridgewater was her best option. The firm offers equity release plans in England, Wales, and Scotland.
Bridgewater’s home reversion plan required the homeowner to be 65 years of age, and it offers you a flexible release plan with a starting lump sum of £50,000. Lisa’s home was worth €200,000. Thus, Bridgewater offered her a lump sum of about €120,000 – they offer up to 60% of your home’s market value in a plan based on the property value and age of the individual.
Lisa used this cash to finance her first book ‘The Financial Guru’, and with a sale of over a million books, she’s now about to publish her second book. Like her, you can also actualize your dreams with equity release. All you need is a home worth more than €70,000 in the UK, and be over 55 years of age. It’s that simple!