How your property wealth can help your family

Having a place to call home is vital, with helping their children to get onto the property ladder a significant ambition for many families. Here we explain how to release funds from your home to help out loved ones.

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Cost of financial support

Research reveals that over-55s in the UK generally spend £18,000 when helping their relatives, which could lead to a tricky financial situation if you are approaching retirement or are retired.

Releasing property wealth

Unlocking your property’s wealth with equity release can help your loved ones if you are a homeowner in the UK over the age of 55.

The most popular type of equity release, a lifetime mortgage, enables you to access a portion of the value of your property as tax-free cash. Retired couple Margaret and David Taylor set up a drawdown lifetime mortgage when their grown-up children needed financial help to get ahead – son John wanted help with a deposit on his first home, while daughter Susan needed a helping hand to pay for her forthcoming wedding expenses.

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Access equity tax-free

Their drawdown lifetime mortgage enabled Margaret and David to unlock their equity tax-free while remaining as the sole homeowners. As they used a lender approved by the Equity Release Council, they would never owe more than their property’s value and no monthly payments were required. After they helped their children to succeed in their goals, the couple even had enough money to take a holiday.

The couple’s drawdown lifetime mortgage guaranteed that they could again draw down funds in the future, keeping a percentage interest-free in a reserve.

The loan is repaid through selling your house once the last deed-holder dies or goes into a long-term care home.

Equity release Wroughton is available from specialists such as

Equity release considerations

When freeing up equity from your abode, ensure that you understand your current financial position and how it might alter over time. Taking a portion of the value of your home now may reduce your estate’s value over time; in addition, it could impact your access to means-tested state benefits.

A wide range of plans is available, so ask your financial adviser for a personalised illustration to comprehend the various types of deal if this is a route you are considering taking.