What is Equity Release?

1. What is Equity Release? Equity Release simply refers to raising a cash lump sum or income from your home. Equity Release schemes are the different means by which equity can be released from your home. There are two main types of Equity Release plans: LIFETIME MORTGAGE PLANS - AGE 55 - NO UPPER AGE LIMIT A lifetime mortgage is simply a mortgage which operates in a reverse fashion. This plan enables you to borrow cash funds from the property without a monthly mortgage payment attached. The mortgage debt would roll up/accumulate on a lifetime fixed interest rate. This plan would reduce the inheritance remaining for your beneficiaries. This option now offers a partial inheritance guarantee which would require discussion with your advisor.

2. What is Equity Release? The above informations relates to a roll up lifetime mortgage. To understand the features and risk please fell free to request a personalized illustration. There are 4 main version of lifetime mortgage plans, each designed to do a different job: * Roll up: cash lump sum * Roll up: draw-down - This provides the option to draw funds as and when required. * Interest only - The option to make monthly interest payments * Enhanced lifetime mortgage plan - This option provides increased lump sums to those suffering with underlying illnesses

3. What is Equity Release? If you're a homeowner aged over 55*, Equity Release could help you to free or "release" - equity from your home, so that you've for extra cash to spend on the things you want or need. "Equity" simply refers to the difference between what your property is worth and any outstanding loans, such as a mortgage loan secured on the property. For example: * Your house is worth £150,000. You have retired and paid of all your debts, including the mortgage. Your equity is £150,000. * You bought your house for £100,000 with the help of mortgage of £80,000. The value of the house is now £200,000 and the outstanding mortgage is £10,000. Your equity is £190,000.

4. What is Equity Release? It's entirely up to you what you spend your equity on and how you receive it you might want a one-off lump-sum or you might choose regular monthly installments. We'll discuss both to these options in more detail later in the guide. *for some plans, this maybe order.

5. Why should I consider Equity Release? Equity release has the potential to unlock a tax free, lump sum from the value of a home-owner's property. Most importantly., they can then stay in their home and, with some equity release schemes, continue to own 100% of the property. The most popular reasons for taking out equity release schemes include: * Home improvements (new conservatories, central heating, double glazing, repairs, garden improvements) * Holidays, cruises and short breaks * New cars, caravans, holiday homes * Family treats (grand-children's school fees, gifts) * Improve retirement or enable early retirement * Private medical care or mobility items (scooters, stair lifts) * Visit family or friends overseas * Help children onto the property ladder or to reduce their mortgage * Reduce outgoings

6. Why should I consider Equity Release? It's entirely up to you what you spend your equity on and how you receive it - you might want a one-off lump-sum. Other factors when considering equity release are: * Converting unsecured to secured debt on an increasing roll-up basis * Reduction of inheritance left * Impact on means tested benefits * Reduction in options if deciding or move or downsize at a later date Here are some alternative options to achieve the above without having to raise equity from your property: * Downsizing * Unsecured borrowing * Taking in a lodger * Using other assets and savings

7. FAQ'S Q: Will i have to make monthly repayments? A: No, unless you choose an interest only lifetime mortgage Q: Can i live in my home for the rest of my life? A: Yes you and anyone else named on the agreement have security for life. Q: How long does it take to get the money? A: It can be as little as 3 or 4 weeks one we have received your application, but normally takes 6 to 8 weeks. Q: Can I do Equity Release if I have a mortgage? A: Yes. As long as we can raise enough money on the Equity Release plan to pay off the mortgage and any other loans secured on the property.

8. FAQ'S Q: What fees are payable upfront? A: At ERIC we don't charge any upfront fees and you are under no obligation to proceed at any stage of the process. If you do apply for a plan you will need to pay for the valuation of the property, usually between £200 and £300. In a large amount of cases our clients have received a grove independent valuation. All other fess will be taken out of the amount released. ERIC typically charges 1.5% of the amount of the loan on completion. Q: Can I move? A: You can move even if you have an equity release plan in place. Plans are portable, subject to the lenders terms and conditions. If you move to a smaller property and wish to transfer the mortgage you may have to repay a portion of the loan. you may also have the option to repay your loan if you downsize. We recommend you highlight to your advisor this as being an important option for the future.