Equity release is normally available to those aged 55 and over, proving to be a financial lifeline for those living in properties that may be worth hundreds of thousands of pounds but with insufficient income.

More and more people are using equity release to, pay down debts, boost their income, help enjoy a comfortable retirement or plan capital expenditure.

Moving home
can be a stressful and expensive process at any age. Many people would prefer
to stay put and benefit from the 'equity' or value tied up in their homes, and
equity release schemes allow them to do that. 

These are
the main options available to older homeowners:  

Retirement interest-only mortgage
(RIO)

A RIO mortgage is similar to a standard interest-only
mortgage, but in this case the loan is usually only repaid when you sell the
property, die or move into long-term care. RIO mortgages usually have a minimum
age requirement of 50, though some lenders may require borrowers to be 55 or
60.

Lifetime
Mortgage  

With a
Lifetime Mortgage, a loan is taken out on the property to provide a lump sum,
an income or a combination of the two. No interest is payable until the home is
sold, which could be when you and your partner have both gone into long-term
care or died. 

A Lifetime
Mortgage with a drawdown facility allows you to take the cash in stages, as and
when suits you. This gives flexibility and the reassurance that you can access
further funds at some point in the future, should you need them. It is more
cost-effective, as interest is only charged on funds when they are drawn down. 

Home
Reversion 

With a Home
Reversion scheme, you sell all or part of your home in return for a tax-free
lump sum or a regular income. These schemes are normally available to
homeowners aged 65 and over. 

You will
normally receive below a below market value for your property, as you retain
the right to stay in your home rent-free until you move out permanently or die. 

When this
happens, you or your estate will revive the value of your share from the sale
proceeds. The value you receive will be the amount your home sold for, minus
the share you sold to the equity release provider originally. This means you'll
know exactly what percentage of your home's value will be left to your estate
on your death. 

Professional
advice is essential and equity release isn't the right solution for everyone.
Releasing cash from your home reduces the value of your estate and the amount
of inheritance you leave, so you should involve your children and dependants
from the outset 

Think
carefully before securing other debts against your home. Equity released from
your home will be secured against it.