Is Equity Release based on income?
The simple answer is no.
Equity release is essentially a loan with your property used as security, in the same way a mortgage is. The lender will value your property and allow you to borrow a maximum percentage based on this. Your age and health will also play a part in the decision. The older you are, the more you can borrow as statistically you will have less time to live - which means the less time before the funds can be redistributed to someone else. In much the same way, some lenders will offer more depending on your health - the more ill you are or have been, statistically the quicker the debt be repaid.
Of course some people live for much longer than others, even with serious health conditions - in these instances the
No negative equity guarantee offered by all lenders who are part of the Equity Release Council, really comes in to play.
With Equity Release you can either repay the interest monthly or let the interest roll-up, where it is added to the loan each month so you don't make any repayments. Upon entering long term care or upon death, the maximum amount a lender can reclaim is the total value of the property. In the past, if the debt was greater than your homes value then any extra due was passed on to family to repay.
You can also opt to leave a guaranteed inheritance which is expressed as a percentage of your property value, this will however reduce the amount you can initially release from your home.
Don't forget, all funds paid by Equity Release plans are done so tax free so the figure you agree is what you will get. This can however impact any benefits you receive.
To discuss your circumstances further, in your own home at a time which suits - call to book your free appointment.