Frequently Asked Questions | Equity Release & Lifetime Mortgages
Equity Release Advice
What Can You Use Equity Release For?
8th December 2022
Equity Release Advice
What Can You Use Equity Release For?
8th December 2022


Homeowners have a lot of questions about equity release. Here are the most common ones, along with answers. Equity release is a way to access money is exactly what is says, releasing equity built up in your home

Our team at The Mortgage Hive have offered equity release and advice for several years. Over this time, we have been asked several questions, all of which are valid and asked regularly, so we wanted to pull together an article with some of the most frequently asked questions.

You borrow against the value of your home. It's a great way to supplement your retirement income or help out loved ones in need.

But it's important to understand the risks before deciding whether equity release suits you. Read on to learn more. If you have any other questions, please get in touch with our team; we are always more than happy to help you in any way we can.

What Is Equity Release And How Can It Help?

The first thing we get asked regularly is what equity release is. Simply put, it is a way for anyone over 55 to access funds tied up within your property. You can do this whilst continuing to reside within your home, with the option to access the funds as a one-off payment, Or a drawdown facility where you can release additional money in instalments or even a combination of both options.

One of the most significant benefits of using an equity release is that the funds can be used for anything at all. You can use the money for home improvements, income support, financial aid or care services, and any other reason you might require money.

One thing to remember is that an equity release is still a form of a loan.

Is There A Stigma Attached To Equity Release?

Equity release used to have a negative stigma attached to it; however, in recent years, the innovation of the product has meant it has been able to shake this negative connotation. One significant change that has allowed this to happen is the removal of certain plans; these have been replaced with a wide range of products suitable for everyone interested in an equity release option.

Equity Release can be split into 2 types, Home Reversion and Lifetime Mortgages. With Home Reversion, you sell the property and become a lifelong tenant. This still has a negative stigma as you no longer have a property you can leave to your beneficiaries. However, with a Lifetime Mortgage you keep ownership of your property, You can make interest only payments. Safeguarding equity you can leave to loved ones.

Due to the ever-growing financial market, the amount of lenders available has increased; this means clients can get an equity release with a much lower interest rate, along with incentives such as cashback that will help reduce any initial costs, making it much more accessible.

Can The Amount Exceed The Value Of My Home?

If you take out an equity release with a provider that is a member of the Equity Release Council they will be required to follow certain principles. this will be under a “no negative equity guarantee'', this simply means you will never need to repay more than your property is worth.

Can I Move To A New Home With Equity Release?

If you decide to move home after taking out an equity release, you will more than likely be able to transfer this plan to your new home; this will be at the lender's discretion and whether they are happy to proceed.

Each lender has its own terms and conditions; the requirements should be discussed before you take out the equity loan so you know the terms that need to be met.

If you were to purchase a home that is more expensive than the property you are selling, You can even get an equity release product to help fund the difference and complete the purchase.

What Qualities Should I Look For In An Adviser?

When it comes to searching for an equity loan, it is recommended for you to speak to a Financial Conduct Authority registered financial adviser. Another option is to speak with someone who is a member of the equity release council (we are part of this organisation); this will give you peace of mind you have spoken to someone who has a solid understanding of the processes and products on offer.

There is a large number of products on the market for equity release, speaking with a good adviser can quite literally save you thousands of pounds on the product you choose to go with; sometimes, you may even find the adviser can provide you with an alternative to an equity loan that would suit you better, so speaking to someone who is regulated should be on the top of your list when it comes to priorities.

Contact The Mortgage Hive For Equity Release Solutions Today

If you have any other questions about equity release or want to know more about how it could work, please don’t hesitate to contact The Mortgage Hive. Our team is always happy to work with you and answer any questions or queries you might have; equity release can be complicated, but our team will help explain it in any way we can.

Contact us today to learn more about how we can help release equity work for you! One of our advisers will always be happy to talk to you.