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What is Equity Release​

Equity release is a way to get money out of your home's value, or equity without having to sell it. You'll get a lump sum of money or smaller amounts over time, but you can still stay in your home. Learn more about equity release here.

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What is Equity Release​

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  1. What is Equity Release? https://www.cozmomortgages.com/

  2. Equity release allows you to make large purchases, pay off a mortgage, or donate generously to loved ones.  It's a financial instrument that unlocks property wealth rather than using savings or a personal loan. In 2022, 93,000 clients used equity release solutions to access more than £6.2bn of property wealth, up from 76,000 in 2021.  It's popular with retirees whose homes have appreciated.

  3. What are the different types of equity release?

  4. Lifetime Mortgage Lifetime mortgages entail home equity loans. You can stay in your home until you die or enter long-term care without repaying it.  There are two ways to control interest on the debt:  Interest-paying lifetime mortgage - You pay interest as you go. Interest won't compound, saving you money.  An interest-roll-up mortgage may be better if you don't pay until your home sells. However, this may be far more expensive.  Equity release mortgage providers often promise no negative equity. This means you'll never owe more than your home's sale price. 

  5. Home reversion If you choose a home reversion scheme, you’ll sell all or part of your property while keeping the right to continue living in it until you die or move into long-term care.  You can choose whether you’d prefer to be paid a lump sum or a regular income.  Something to keep in mind is that you won’t receive full market value for your home, whether you sell it all to the lender or just a percentage of it.  Some home reversion providers will only work with those who are aged 60 or above. If you’re in your 50s, we can help you find one who’ll work with younger homeowners. 

  6. You may create your own equity release arrangement by selling your home privately and living there for life. If you consult a financial advisor and lawyer upfront, this could save you a lot of money. This requires contracts and financial planning.  Private equity release

  7. Do you pay tax on equity release? You won’t have to pay any income tax on the money you receive through equity release. After all, it’s technically a loan rather than a source of income.  If you’re concerned that your estate will be subject to Inheritance Tax when you pass away, equity release could help you reduce your IHT liability. 

  8. Do you pay tax on equity release? However, if you pass away within 7 years of giving away your assets to family or friends, these gifts may be taxable. The exact tax rate will vary depending on how many years have passed between the date the gift was given and your death.  You should seek financial advice on inheritance tax and how it might impact you. If you’d like help finding the right financial advisor, get in touch with Cozmo Mortgages.

  9. Contact Us Mail on: info@cozmomortgages.com Address: 803, Silver Tower, Business Bay, Dubai, P.O.Box 238065 Contact Number: 97145587195 Visit: https://www.cozmomortgages.com/

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