"Wealth is not his that has it, but his that enjoys it"
"Wealth consists not in having great possessions, but in having few wants"
"Time is the most valuable thing a man can spend"
- Laertius Diogenes
"The glow of one warm thought is to be worth than money."
"I don't care too much for money for money can't buy me love"
- The Beatles
"Simple, genuine goodness is the best capital to found the business of this life upon. It lasts when fame and money fail, and it is the only riches we can take out this world with us."
-Louisa May Alcott, Little Men
"And though I have the gift of prophecy, and understand all mysteries, and all knowledge, and though I have all faith, so that I could remove mountains, and have not charity, I am nothing."
"Not he who has much is rich but he who gives much"
"Life is what happens to you while you are busy making other plans"
"I pity that man who wants a coat so cheap that the man or woman who produces the cloth shall starve in the process"
Equity release describes ways of accessing your property's value to have cash available in later life.
This video will provide you with more detail, explain some of the options and run through key factors and considerations.
Equity Release is available to you if you are aged 55 or over and where you have a reasonable level of equity in your property. There are two main types of equity release products, which are called lifetime mortgages and home reversion schemes.
Lifetime mortgages are where you take a loan against your property, home reversion is where you sell a part or all of it.
It is important if you are considering any form of equity release or borrowing to look at your options carefully, comparing all the factors, costs and legal aspects.
You should also look at alternative options, which do not involve selling a proportion of your property or borrowing against it. Any decisions should only be taken once all these options are fully understood and you have received the benefit of expert advice.
Of the two types of equity release schemes available, it is the Lifetime Mortgage which is by far and away the most popular in today’s market-place.
A lifetime mortgage is, as the name suggests, a loan and therefore you will retain full ownership of your home.
Most lifetime mortgages allow the interest to be rolled up which means the interest is added to the loan but many of the newer schemes allow you to pay the interest if you want to. Some allow you to do either over the life of the loan, it can be that flexible.
Be aware that if you choose to roll up the interest - the loan will grow over time so this needs to be carefully considered.
The capital plus interest is payable either on death or if you go into long term care.
In the case of couples, this relates to the second death or the second person going into care.
Interest rates are likely to be fixed in most cases. If they are variable they will be capped, which means they cannot go above a certain maximum level.
There are various ways a lifetime mortgage can be structured. We can show this as an example on a loan size of £80,000.
One is to take a lump sum up front meaning interest is charged on the full amount from day one.
The second way is to arrange a drawdown facility and to take the loan in stages as and when you need it. In this case interest is only charged on the amounts you have drawn down. This can save money as the undrawn parts do not have interest applied to them until they are drawn down.
The third option is to take your lifetime mortgage in the form of a regular income again with interest only being charged on the amounts released.
The other Equity Release product available to you is a Home Reversion scheme.
Put simply, a Home Reversion scheme is a means of selling a share or all of your home, at a discounted value in exchange for a life time tenancy, which is rent free. In selling that part of your property to a Home Reversion Provider, you release equity from the value of the part you sell.
The tenancy will guarantee your right to remain in the property until death or having to go into long term care.
Then the property is sold, and the proceeds of the sale divided between your Estate and the Home Reversion Scheme provider who will receive the value of their share based on the sale price of your property at that time.
One of the biggest concerns many people have with equity release schemes is that they believe you could lose your home.
This challenge has been tackled head on by the Equity Release sector and today, modern schemes now come with a legal guarantee that you cannot be removed from your property and the value of the loan will never be more than the value of the property.
A big question around Equity Release schemes is whether you can still move to a new house after you have entered a scheme. The answer is ‘yes’ providing the new property is acceptable to the lender and you have enough equity to transfer your loan. Where there is insufficient equity, part of the loan may have to be repaid to the lender from the sale proceeds, especially when the new property has a much lower value, when for instance you are down-sizing.
Another common question is “how much can I or we borrow” – schemes vary and there are various factors which dictate the maximum loan. Your age or ages and your property value are the most important factors. The older you are the more you can borrow. Generally, the maximum is 50% of the property value, but most of the time will be lower than this.
There can be many reasons why Equity Release is required by home owners and it is worth looking at these and considering some of the factors:
Most popular is to use equity release to top up your income in retirement. This means using some of the accumulated growth of the house value and turning this into additional income or capital to support your future lifestyle. This could be to help with specific expenses, your monthly bills or one-off expenses, like buying a car, a caravan, a holiday home or carrying out those much-wanted home improvements.
Another popular reason is to release the money to help with family issues, such as helping a child or a grandchild with their deposit on a property of their own.
In some cases, equity release can be used in financial planning to help structure assets and create liabilities in such a way as to reduce future Inheritance Tax.
Finally, it may be used to help meet Long Term Care costs, especially when care is to be provided at home. It should be noted that if care is required in a nursing or residential hone this may not be possible and the property may have to be sold.
In each of these cases the best solution could vary and as said earlier, there could be other solutions, which do not involve Equity Release or borrowing at all.
This is an area of finances where many new innovations are coming in, including what are known as Retirement Interest Only Mortgages – so it is vital to look at all your options.
There is very prescriptive regulation in this market and in addition, The Equity Release Council and its members promote high standards of conduct and practice, plus significant consumer safeguards.
There are few financial subjects where the value of advice is more important, in fact you cannot take out any equity release loan without using a specialist financial adviser and getting independent legal advice.
We can help you and advise you if Equity Release is suitable for you, the amounts you can borrow, the costs involved, and provide you with a detailed appraisal of your options and everything you need to know to make an informed decision.
What our Clients say
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We first met Alan in 1999; we both wished that we had known him many years before. Alan has several attributes, in addition to his financial skills, the ability to listen and caring about people. From the first day that we met our financial affairs became organised, now to the point where we can say that we never have any financial worries, in fact we seem to be better off financially now more than ever before. All due to Alan's guidance and expertise. We both consider Alan a very good friend, nice to know he would be there if we needed him.
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It has been almost ten years now since David and myself first consulted you for advice and guidance on financial matters, so I feel that it's time that I wrote to thank you for the help and assistance that has always been forthcoming. Shortly after we had moved house in 1992, you advised us to switch from one type of mortgage to another, which turned out to be the most successful financial move we had made in years. Over the years we contacted you for financial advice and guidance when our daughter was heading for University, on taking out life and house assurance policies and general financial overhauls. Your recommendations have always been sound and given in a manner both efficient and friendly, none more so than when I was widowed just over two years ago and needed a considerable amount of help, immediately given upon request and with great sensitivity during what was a very difficult time for me. There is little I can add, except to also thank the rest of your staff, friendly voices at the end of the telephone who take and pass on my enquiries and ensure that I always receive a fast and efficient response. I can recommend, without reservation, Interface Financial Planning Limited.
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Alan has been our financial adviser for 5 years. He is professional, well informed and reliable, and his advice has been invaluable to us. He and his staff are courteous and efficient, and we have no hesitation in approaching him for advice on any aspect of our finances, or in recommending him to relatives, friends and colleagues.
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Alan Moran has acted on our behalf for over 10 years. Alan has over this time always listened to our requirements and fed back to us the best options, given our constraints and made very useful alternatives suggestions. He has always been friendly and considerate. I would not now consider making any financial investment or savings decision without first consulting him.
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I was introduced to Alan Moran in 1999. I was juggling my finances just to keep afloat and was wary of taking outside advice. A close friend of mine recommended Alan as a reliable and honest adviser who would take great care in choosing the right path to get my financial affairs on track. Trusting their judgement, I arranged to meet Alan. I was treated with the utmost care, given time to consider the guidance that Alan provided and never pushed into taking on financial services. Meeting Alan and acting upon his sound advice has improved my life no end. Even on a limited income, prudent planning has enabled me to save for annual holidays and even cope with the occasional unexpected expense as well as keep up to date with all of my bills. I count Alan among my friends and have recommended him to both my sister and my parents. He really is the genuine article and I cannot thank him enough for all he did for me.
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Alan was introduced to me by a friend at the time when my finances were a mess and I just didn't know what to do for the best. Calmly, kindly and sympathetically Alan sorted everything out. Since then he and his wonderful team have sorted out my house and car insurances, my son's mortgage and pension plan and, last but not least, guided me through the ramifications of buying a property in Spain. I have recommended him to friends, as his knowledge of financial matters is very comprehensive and sound. Alan is able to offer advice without making the recipient feel a complete idiot and he takes time to explain things thoroughly and in a way that is understandable.
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Alan's sound advice has improved my life no end.
I have been a client of Alan Moran's for 12 years and during that time he has given me valuable advice on all aspects of finance. He always explains everything thoroughly and has been particularly supportive during periods of crisis in my life. He helped my late husband and I when his business went into liquidation and was even more valuable when my husband died, pointing me in the right direction with my finances and getting me to invest my money sensibly and with the just rewards that I am now experiencing. I regard Alan not only as my Financial Adviser, but also as my friend, and would, and in fact have, recommended Interface Financial Planning Services to anyone needing a Financial Adviser they can trust.
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We have been clients of Alan Moran (Interface Financial Planning Ltd) for over five years. In this time, his highly professional, friendly and supportive approach has provided us with a thorough review of all aspects of our finances. We are now in a position where both our short term and long term financial planning is well organised and structured to suit our personal needs. We have recommended Alan and his team to many of our friends and know that they, like us, have been impressed and grateful for the care he has taken to provide such individual service.
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Just dropping you a line to say thank you for all the help you've provided us throughout the purchase of our house and the investment policies you've recommended us. May we both thank you for the very professional and friendly way, in which you handled our business, and look forward to hearing from you in the future.
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Seeking financial advice for the first time, I received details of three local IFAs. However, these cold statistics gave no idea of the actual person to whom I would need to entrust confidential information. Sometime later I came across an article in a local paper by Alan (Moran) in which the writer came over as friendly and trustworthy as well as being a qualified IFA. Having contacted Interface Financial Planning, the result has been a friendly relationship and valuable advice on our mortgage, future planning, savings and pension investments.
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We first met Alan in 1999; we both wished that weIt was very important to gain financial advice in such a challenging time after my wife passed away. I needed to ensure that, as a newly single parent, I had got my finances sorted out and had also made provision for my children in case anything happened to me. As neither my wife or myself had made a will, Alan’s advice and guidance through this very difficult period was invaluable, especially dealing with the paperwork associated with this.
Paul from Birmingham
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I realised that I had been operating both my general and particularly financial affairs reactively for far too long and it was time I behaved like a grown up. So I started to think about how I might achieve some sort of practical stasis. Alan, was immediately empathetic, encouraging a nd, above all, practical and straightforward. I hadn’t consciously taken financial advice before, but came to realise that the various salesmen who had sold me policies and pension upgrades were not motivated in the same way a ‘proper’ financial adviser was (or should be). Consequently, I had taken on commitments that weren’t necessarily in my best interests. Alan is genuinely interested in my circumstances, and owns a readiness to go beyond what I had imagined would be the boundaries of the role.