Equity release and your estate

Equity release lets you cash in on your life of investment, but there’s often a fear that you’re leaving nothing left for your family’s inheritance.

The myth – equity release will leave your estate with nothing to inherit

It’s easy to see why this myth exists. Equity release is a way of taking the value of your house with the promise that once you die it can be sold to pay back this cash injection.

Stories are told of greedy investors waiting in the wings and rubbing their hands in glee once you pass away so that they can get their grubby hands on all the money and run off laughing as your children and grandchildren leave dejected and destitute.

But this isn’t a children’s fairy tale, and financial investors aren’t really the bad guys that family slapstick films suggest.

In truth, lifetime mortgage lenders and providers of home reversion plans are businesses wanting to make a reasonable and competitive deal that suits both parties.

The reality is that both systems of equity release come with a clause for ring-fencing, the act of setting aside part of the value of the house to protect it from being used to pay back the equity release. Definitively earmarking it for your family’s inheritance.

Spending time with your family – when now is better than never

Access to your money will enable you to spend time with your family, and that’s better than any amount of inheritance. By taking out your equity in advance of your death in the form of a lifetime mortgage or home reversion plan, you don’t lose the money, you simply change when you get it!

Leaving it in the house means struggling yourself to give it to your heirs, but taking it now means you can give them something better – time.

In today’s society, it is easy to become fixated on making sure you are leaving large sums of money behind, but really it’s far nicer to live life without the kind of worry that can leave you acting like Scrooge whenever you go out. A comfortable bank account means you can take your family on holiday or help them with their immediate needs. Why make them wait until you die before they see your love or financial support when you could be there with them and support them through whatever problem they have right now?

Equity release really is the best of both worlds – properly arranged it will leave them with a significant lump sum when you do finally pass away, but it will also allow you to have quality experiences with them in the many years before then.

Finding the right balance with Your Funding Expert

It’s true, some less caring mortgage brokers will push for you to take out 100% of the available equity of your house. They’ll sell you a lifetime mortgage with a high interest rate and convince you that it doesn’t matter – after all, you’ll never have to pay for it! At The Mortgage Hut, we’re nothing like that.

As specialised advisors with an unprejudiced overview of the entire market, we care about getting you the best deal for your circumstances. We make sure that the product you end up with is the one that matches your family’s needs. We will help you properly ring-fence a suitable portion of your home’s value to provide for your loved ones when you’re gone, and we’ll also get you the money you want right now to enjoy your life.

For help and understanding of equity release, why not contact us? You can fill in our contact form or simply pick up the phone for a chat. Our advice is free, we don’t hard sell and there’s absolutely no obligation from you. Release your investment and live a fuller retirement – give us a call today!

Equity release

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.