Video transcript

 

Hello, my name is Tim Spencer, and I am the Managing Director of Optimus Mortgages Ltd. At Optimus Mortgages we understand that you may have lots of questions before deciding whether to take equity release, so here is a short video that answers some of the questions that we get asked most frequently.

What is Equity Release?

Equity release is a way for homeowners over 55, whose property is worth at least £70,000, to release tax-free cash from their homes. There are restrictions on the types of property that may be eligible for equity release. It is an increasingly popular way for people in, or approaching, retirement to boost their finances.

There are a number of different equity release plans available.

 

A lifetime mortgage is a loan secured against your property that runs until you either enter permanent, long-term care or you die. There are a number of different types available and you are not required to make any repayments, but you can if you wish to. If you decide not to make repayments, the interest is added to the loan amount and can quickly increase the amount owed.

A drawdown lifetime mortgage is similar to the standard lifetime mortgage. However, with the drawdown lifetime mortgage, you can access your money with more flexibility. Rather than just receiving a one-off lump sum, you have the option to release your cash over time, as and when you need it. Because you only pay interest on the cash that you have taken, these equity release plans can often prove to be more cost-effective.

A retirement interest only mortgage is a mortgage that lets you pay the interest monthly, without reducing the original amount you have borrowed. They are very similar to standard interest only mortgages, but with some key differences. With most retirement interest only mortgages in the UK, you only repay the loan when you sell your property, move into full-time care, or pass away. You must also prove you can afford the monthly interest repayments. 

A home reversion plan allows you to exchange the ownership of some or all of your property for a lump sum of cash, along with the right to stay in your property, rent-free, for as long as you live subject to the lender’s terms and conditions. These plans involve the sale of part, or all, of the property and would result in a change to the title deeds and the sale will only achieve a percentage of the property value.

An equity release plan is not the only option if you wish to free up some cash in retirement. Downsizing the property or borrowing money from a close friend or family member, could be a preferable alternative to releasing equity from the home.

Equity Release may not be suitable for everyone.

Releasing capital from your property, will reduce the amount of inheritance that can be left and may impact the receipt of any means-tested benefits.

Is Equity Release regulated? Is Equity Release safe?

Yes, equity release is regulated just like any other mortgage. At Optimus Mortgages we are proud to be members of the Equity Release Council.

 

The Equity Release Council is an organisation that was created to promote safe equity release products and to safeguard the interests of homeowners.

 

You need to receive qualified advice before committing to equity release and you can check online that the broker you are dealing with has the correct licence and is authorised to give you the advice you need, which is exactly what you get from Optimus Mortgages.

Equity release may involve a home reversion plan or lifetime mortgage which is secured against your property. To understand the features and risks ask for a personalised illustration.

What can Equity Release be used for?

Equity release can be used for many reasons, and at Optimus Mortgages, we understand that all our clients have different circumstances and needs.

 

One of the most common reasons for using equity release is to repay an existing mortgage or debt. You may want to do some home improvements or create a more comfortable living environment for your retirement.

 

Having the holiday of a lifetime is a dream many people have, and equity release can help them realise that dream. Holidays in the UK are becoming increasingly popular and using equity release to buy a new motorhome is giving many people the freedom to explore the many beautiful parts of the country the UK has to offer. Wherever your travel desires take you, there are financial options available for you to help make those dreams a reality.

 

Another common reason for taking equity release is to support families, usually to help children or grandchildren get on the housing ladder by providing them with the deposit to help them buy their home.

An equity release plan is not the only option if you wish to free up some cash in retirement. Downsizing the property or borrowing money from a close friend or family member, could be a preferable alternative to releasing equity from the home.

Equity Release may not be suitable for everyone.

Releasing capital from your property, will reduce the amount of inheritance that can be left and may impact the receipt of any means-tested benefits.

How much could I release with Equity Release?

This depends on your age, how much your house is worth and your personal circumstances. There are restrictions on the types of property that may be eligible for equity release.

 

You can release a larger percentage of your home’s value the older you get. By taking equity from your home you may lose your entitlement to some means tested benefits. Always check what you may lose as well as what you can claim before making a decision. 

 

At Optimus Mortgages we will have an initial no obligation and no pressure discussion with you to identify just how much money you require and following our discussions, we search the whole of the market to find an equity release plan that best suits your finances and objectives. If equity release is not suitable for you, we will tell you.

Will I still own my home with Equity Release?

There are a number of different equity release plans available.

 

A lifetime mortgage is a loan secured against your property that runs until you either enter permanent, long-term care or you die. There are a number of different types available and you are not required to make any repayments, but you can if you wish to. If you decide not to make repayments, the interest is added to the loan amount and can quickly increase the amount owed.

A home reversion plan allows you to exchange the ownership of some or all of your property for a lump sum of cash, along with the right to stay in your property, rent-free, for as long as you live subject to the lender’s terms and conditions. These plans involve the sale of part, or all, of the property and would result in a change to the title deeds and the sale will only achieve a percentage of the property value.

 

Equity release may involve a home reversion plan or lifetime mortgage which is secured against your property. To understand the features and risks ask for a personalised illustration.

Can I get Equity Release if I already have a mortgage?

Yes. Repaying an existing mortgage, especially an interest-only mortgage that is coming to an end, is one of the most common reasons that clients take equity release. The only condition is that the equity release is the only ‘charge’ against your property on completion.

 

When you are considering taking out an equity release product we highly recommend you consider other alternatives that may be more suitable for you.

Do I have to make monthly payments with Equity Release?

No, there is no obligation to make monthly payments with equity release, not unless you want to. The loan, plus any rolled-up interest, will be paid back when your plan comes to an end, usually when someone either enters permanent, long-term care or they die. 

 

Where interest is rolled up, it can quickly increase the amount owed.

By taking equity from your home you may lose your entitlement to some means tested benefits, always check what you may lose as well as what you can claim before making a decision.

Could my family inherit my Equity Release debt?

No. Equity release lenders must subscribe to the Equity Release Council, which has a regulatory code of conduct which states that all plans come with a ‘no negative equity’ guarantee, so you will never owe more than your home is worth and there will never be a debt for your family to take on.

Where interest is rolled up, it can quickly increase the amount owed. Releasing capital from your property, will reduce the amount of inheritance that can be left and may impact the receipt of any means-tested benefits.

How much does Equity Release cost? Is Equity Release expensive?

At Optimus Mortgages we believe in being competitive and transparent on fees.

 

Your initial consultation is free, and you will not be asked to pay a fee until we are ready to submit the application on your behalf. At that point we ask for an application fee of £395.00. Our broker fee of £995.00 is payable on completion of your mortgage. The total fees payable to Optimus Mortgages Ltd are £1,390.00.

 

As when you first took out your mortgage, there are additional services and processes that you will need to pay for, such as solicitor’s fees, the lender’s application fee and surveyor’s valuation fee and these are additional expenses of which you need to be aware.

Equity Release may not be suitable for everyone.

Releasing capital from your property, will reduce the amount of inheritance that can be left and may impact the receipt of any means-tested benefits.

What should I expect from my Equity Release appointment?

Before you take out equity release, it is crucial you seek expert equity release advice. It is a regulatory requirement, and your application will not be accepted without it. That is where Optimus Mortgages comes in.

 

The first step is to have a free, no obligation chat with us to see if equity release is going to be right for you. If equity release is not right for you, we will tell you. If it is, we will arrange an appointment to carry out a full fact find with you. We encourage clients to involve their family or a trusted friend in these meetings, either online via a video call or on the phone. It is very reassuring to have the support and acceptance of others, and they may think of questions that haven’t occurred to you.

 

Once we have completed the fact find, we will complete our research for you. Our equity release advice is unique to you and your needs and is delivered by your own fully qualified adviser. Your dedicated adviser will take the time to understand you and your unique requirements, ensuring that they find and recommend the right solution for you.

Part of the advice process will be to explore other options in addition to equity release. When you are considering taking out an equity release product we highly recommend you consider other alternatives that may be more suitable for you.

 

We will be with you every step of the way on your equity release journey. Your dedicated adviser will support you throughout, answering any questions you have and overseeing your application right through to completion.

Equity release may involve a lifetime mortgage or home reversion plan.  To understand the features and risk, ask for a personalised illustration.

Is Equity Release right for me?

At Optimus Mortgages we understand that it is important that you have all the information you need about equity release to make an informed decision in your own time.

 

Please contact us via the links on our website, call us on 03330 067783 or email us at enquiries@optimusmortgages.co.uk for a free no obligation initial chat. If equity release is not right for you, we will tell you.

By supplying your email address, you are confirming that you are happy for us to contact you via email regarding products and services relevant to your enquiry.

Equity Release may not be suitable for everyone.

Releasing capital from your property, will reduce the amount of inheritance that can be left and may impact the receipt of any means-tested benefits.

Use our free calculator

See how much tax-free cash you could release from your home with our our free equity release calculator

Optimus Mortgages Logo - jpeg.png

Speak to an adviser

Book an appointment with a specialist adviser at a time that is good for you

If you are considering equity release we recommend that you read through The Equity Release Council brochure 'Accessing your property wealth through Equity Release'

Optimus Mortgages offer lifetime mortgages, which is a loan secured against your home. Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits.

To safeguard your health, our expert advice is now available over the phone or via video appointment, whichever is right for you. If you are interested in finding out more, please get in touch, either online, or by calling us on 03330 067783. Click here for more info.

See how much tax-free cash you could release from your home with our free equity release calculator

Fast, easy and secure - No obligation to proceed