How much equity can I release? Retired couple check finances

How much equity can I release?

It’s no surprise that ‘How much equity can I release from my home?’ is the most popular question asked by our clients.

If you are considering equity release for a specific purpose, you will have some idea of how much you need to spend. Whether it be for home improvements, buying a new car, or any of the other uses of equity release, you will typically have a figure in mind.

However, the amount of equity you can release will depend on your exact circumstances and needs. How much tax-free cash you can get is determined by many considerations, including:

The Amount Of Equity In Your Property

The first thing you need to work out is how much equity is in your home. This is easy to calculate: it is the fair market value of your home minus any existing debt secured against the property (such as a mortgage).

If you don’t know how much your home is currently worth you may be pleasantly surprised. To get an idea of its value, you can search for similar properties in your local area on websites, such as Right Move, Zoopla and On The Market.

If you live in a rural location or your property is out of the ordinary, and therefore difficult to estimate, try contacting local estate agents for a free valuation. It is worth approaching two or three different estate agents because property valuations are more an educated guess than an exact science.

It is usual to take the average amount of the valuations to get a realistic selling price. However, for the purposes of equity release, you may want to use your lowest valuation. Surveyors acting on behalf of equity release lenders tend to give conservative valuations. Focusing on a lower property value can save you from disappointment.

The Type Of Property

There are many aspects of your home that could affect how much equity you can access, including:

  • Dwelling type – detached, semi, terraced house, bungalow or a flat
  • Construction type – is your house a standard brick-build with a tiled roof? Or is it a modern build with a flat roof, or even a traditional thatched property?
  • Location – is your home near commercial property, or in a flood zone?
  • Tenure – freehold or leasehold. If leasehold, the number of years remaining on the lease. Also, how many people are listed on the title deeds and nature of the tenancy. If you are unsure whether your home is freehold or leasehold, the Money Advice Service has a useful guide.
  • Ex-local Authority – was your property constructed, or once owned, by your local council? If so, this may reduce the amount of equity release you can get. Depending on the type of development, and whether your local authority still owns the freehold, your property may not be eligible for equity release.

Your Age

The older you are, the more equity you will be able to release. For joint applicants, it is the age of the youngest which matters, with a minimum age of 55.

Number Of Applicants

Most lifetime mortgages are designed for a maximum of two owners. It doesn’t matter whether you are married, in a civil partnership, or are co-habiting as long as you are joint owners. Single owners are usually able to release more cash than couples.

Your Health

If you suffer from serious ill-health, or if you’re a heavy smoker, you may qualify for an increased sum.

Your Reasons For Needing Equity Release

Depending on what you’re looking to achieve with equity release, you may not need the maximum amount. The less you borrow through a Lifetime Mortgage the lower the overall cost of the loan.

Whether It Is Suitable For You

Equity release is not right for everybody. For example, if you are looking to repay a big mortgage, you may not be able to release the amount of cash you need with a Lifetime Mortgage.

Every case is different, which is why you should seek advice from a qualified equity release specialist. At Advice for Later Life, our advisers will be happy to discuss your options in a free consultation, without any obligation.

Find out how much equity you could release

Still wondering: How much equity can I release from my home?

If you’re over 55 and own a home worth at least £70,000, we will be happy to find out how much equity is locked-up in your home. Please send us your details in the form below and let us know when is most convenient for us to get in touch.

If you would prefer to give us a call, please contact Adrian in our Sussex office or Dylan in our Surrey and London office.

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