At Home with Carol Vorderman 2013 - (Page 212)

Cash in on your home make sure you know the pros and cons before signing up for equity release E quity release, for homeowners aged over 55, can be a great way to take a tax-free, cash lump sum or an income from the equity (value) your property has built up over the years – without needing to move house or sell up. There are many reasons you might want this extra money: three of the most common are to fund everyday living costs due to a pension shortfall, to do home improvements or vital renovations, or to help out a family member financially. Usually, you have to be over 55 to sign up to an equity release scheme. ‘One thing to consider is that the older you are when you opt for one, the cheaper it’ll be overall as you’ll be carrying it for a shorter amount of time,’ says Tom Moloney, financial advice manager for the debt charity, Step Change (www.stepchange.org). Although there are definite benefits to equity release schemes, there are risks involved, too. There’s a lot to consider and understand before deciding on equity release, so it’s important to take financial and legal advice first. Read the following guide to decide if this is right for you… Two Types There are two kinds of equity release: a lifetime mortgage (where you borrow money against your home) or a home reversion (where you sell a share in your home). Lifetime mortgage: This is the most popular type of equity release scheme. You still keep ownership of your home, but you take out a loan and get a cash lump sum or an income (or both) in return. This is also sometimes known as a ‘roll-up’ lifetime mortgage as you needn’t make monthly repayments – instead, the interest on your loan ‘rolls up’ and the debt (and interest) is repaid when the house is sold, which will be after you die or move into long-term care. If you don’t want a large lump sum straightaway but prefer to have cash to draw on when needed, a ‘drawdown’ lifetime mortgage might be more suitable. It means that you only have to pay interest on the funds which you’ve released – it’s a way to save money. ‘IT’S All been SO SIMple’ Cath Kirby, 60, from Suffolk, took out an equity release scheme to enable her to do some house renovations ‘My sister had used an equity release scheme, and had been very pleased with it. I’d been thinking about doing the same for a long time, then I saw a TV ad for Key Retirement Solutions (www.keyrs.co. uk) and decided to look into it further. ‘Someone from the company visited me at home to talk it all through and he explained everything so simply, it was like I’d known him for years. He was very easy to work with. Before I went 212 | JUNE 2013 ahead, I told my two sons what I was planning. They said the decision was entirely up to me and were pleased I would have the money. ‘I opted for a Lifetime Mortgage equity release scheme and have used the money for new carpets on my stairs and in my bedroom, and bought a new front door and new windows. This year, I’m going to get my garden done, too. Having the money has been such a relief for me. It’s made me feel much happier in my retirement.’ Home reversion: These schemes involve a company or individual buying all, or part, of your home and giving you a lump sum or regular income in return. Although you still get to live in your home, you’re there as a tenant and don’t own it outright (if at all) any more. These types of schemes are less popular than lifetime mortgages. The main Things To consider examine your alternatives. Think about whether there’s any other way to access extra money: ● Can your family help financially? ● Have you any savings or assets? ● Is there a spare room in your house to accommodate a lodger? ● Are there extra state benefits you’re entitled to, but don’t claim for? ● Could your local authority help to fund vital alterations to your property because of mobility issues? ● Would it be better to downsize to a smaller, less expensive property? ● Depending on your circumstances, would an unsecured personal loan or mortgage extension be better in the long run. how much do you need? Rather than think about how much money you can have, ask yourself how much you need. Consider the long-term consequences of borrowing too much money. ‘If you control the amount of money you take initially, you could be applicable for a more competitive equity release plan’, says Tom. ‘This keeps long-term flexibility and planning open, which you may need to access more funds further down the line for long-term care, or for more vital repairs to your home.’ According to Money Advice Service, www.moneyadviceservice. org.uk there may be a minimum Make sure you really understand what equity release is, what the cost and consequences will be – currently as well as long-term – then look at all of those things with your family, too http://www.stepchange.org http://www.keyrs.co.uk http://www.moneyadviceservice.org.uk

Table of Contents for the Digital Edition of At Home with Carol Vorderman 2013

Editor's letter
Carol's hello
News
Summer days
Rear of the year
Shades of citrus
Maxi moment
Good for the sole
Razzle dazzle
Swing by the sixties
All shapes and sizes
Steal her look
The swimwear round
A moment with Carol
Beaming with pride
Loose women
Forever friends
What men want
The D word
Fear not
Keep your flirt on
Sex on fire
Culinary classics
Food glorious food
At a pinch
Oiling the meals
Flaming hot
Under the grill
Raise a glass
Water works
Weight-dropping wonders
Tuck in
Home improvements
Holiday hazards
Proceed with caution
Warning signs
Down to the bare bones
Back on track
A sorry sight
20 under £20
How do they do it?
Rewind time
Lacklustre locks?
Pearly brights
Good job hunting
Old timers
The golden years
Cash in a flash
Money guru
Foster the love
Child's play
Easy as 1, 2, 3?
Summertime accessories
Those in glass houses
On the tiles
Home safe home
Savvy traveller
Holiday honcho
Port of call
Here come the girls
It's a numbers game
Book it in
Up, up and away!
Last word

At Home with Carol Vorderman 2013