Equity Release

‘Better than grandeur, better than gold, than rank and title, a thousand-fold, is a healthy body, a mind at ease, and simple pleasures that always please. A heart that can feel for another’s woe, and shares his joys with genial glow, with sympathies large enough to enfold, all men as brothers, is better than gold.’ Poetry is emotion recollected in tranquillity. It is the music to the soul and the spontaneous overflow.

However, to organize a poetry slam event that will bring the masses together and help spoken word artists and upcoming poets showcase their prowess, then you need the capital to help make this event the talk of the town. Home equity release is one of the best financial products to help you achieve this.

What’s the Home Equity Release?

The scheme is aimed at retirees aged 55+ and homeowners in the UK with estates worth more than €70,000. The plan offers you two options, the home reversion scheme and the lifetime mortgage plan. What makes the financial product stand out from standard mortgages is that you don’t have to make any monthly repayments and you repay the equity release plan when you die or move into residential care.

Another significant thing that makes these plans worthwhile is that you don’t pass on the debt to your kids. Even in the rarest of cases where the value of your residence depreciates to cater to the various expenses and any incurred arrears, the remaining loan will be written off. In any case, due to the improved Equity Release Council regulations1, all the plans offer you no negative equity guarantee2 which protects your family from owing more than the value of the estate. It also ensures that you to transfer your scheme to another estate without incurring any penalties.

With these plans, you also have to get both financial and legal advice before taking out the scheme. According to the Financial Conduct Authority3 (FCA) and the ERC getting the proper guidance from a professional advisor and a solicitor will make sure that you get the best plans and not fall into the trap of quacks. The financial advisor will guide you through the various process and also assist in assessing your property eligibility. They can even offer you better alternatives since these plans also require hefty fees and subject you to early repayment charges.

A solicitor, on the other hand, will help you navigate through the legal requirements of equity release plans. They’ll also walk you through your right after taking the equity release scheme. You must, however, ensure that you’re careful to pick out a plan provider that is certified by the ERC and FCA.

Since 2015, the equity release plans’ interest rates4 have significantly reduced, meaning that you won’t pay very high interests as compared to the traditional mortgages. The amount of interest you pay when you die or move into long-term care will be dependent on how long the plan will run and the type of equity release scheme you opt for. If you, for instance, pick the voluntary repayment option, you can choose to pay the interests monthly – meaning that when you plan ends, you’ll only have to pay back the loan amount.  

Therefore, as most UK spoken word artists say, don’t fret. By taking out a lifetime mortgage plan or the home reversion scheme, you can organize the poetry slam event of the year. So, get up and see your financial advisor now!