Using Equity Release to Fund Live In Care | Bespoke Home Finance

equity release mortgage

Paying for homecare —whether that is hourly care Guildford or live in care Surrey— is a significant long-term commitment with many not having enough funds to opt for it. 

Understanding the Correlation Between an Equity Release Mortgage and Live In Care Surrey

Many people tend to have the majority of their money tied up in their home. An equity release mortgage allows you to benefit from the value of your home and access some of the money tied up in it, without having to move out. 

An equity release mortgage isn’t used exclusively to fund live in care Surrey, you can use the money you release for almost anything. There are plenty of reasons why people choose to release equity from their homes. Some of the reasons include having extra cash on hand, home improvements, paying off unexpected debts and reducing inheritance tax for their loved ones.

Because an equity release mortgage is designed to generate additional income or lump sum payments, it could provide the necessary funds for your live in care Surrey needs. So, if you or your loved one is considering live in care Surrey or even hourly care Guildford, an equity release mortgage could be suitable for you. 

However, it’s of vital importance that you understand seeking an equity release mortgage is a big decision, and it’s essential that you seek expert financial advice and find the right type of equity release for you. 

Types of Equity Release 

There are two types of equity release, a lifetime mortgage and home reversion. Both types of equity release mortgage allow you to stay in your home and release money from the property either in lump sum or smaller instalments. 

Keep in mind that with both options, you’ll still have to pay the costs associated with maintaining your home and buildings insurance. 

Lifetime Mortgage 

With a lifetime mortgage, you essentially take out a loan against your property but still own it. The mortgage term lasts until the owner passes away, moves permanently into residential care or sells the property, at which point the loan must be repaid in full. 

An interest roll-up option offers you either a lump sum or regular payments that can be used to fund hourly care Guildford or live in care Surrey. You are charged interest that is then added to the loan’s total, which is only repaid once the property is sold at the end of the mortgage term. 

Another option is an interest-paying mortgage, in which you receive a lump sum and make either monthly or ad-hoc payments. This reduces or eliminates the impact of interest-roll up at the end of the mortgage term. Similar to the interest roll-up option, the loan is repaid in full once the property is sold. 

Home Reversion Plan

A home reversion plan allows you to sell all or a part of your home at less than market value in return for a cash lump sum. You then stay in your home as a tenant, but rent-free for the rest of your life or up until you choose to move out. 

It’s also possible to sell parts of your home over a period of time, which could be more convenient for those needing to pay for hourly care Guildford or live in care Surrey. 

There isn’t any day-to-day interference as well as any restrictions on the house. It’s as though it’s your private home to live in freely, just like before. 

Could An Equity Release Mortgage Be Right for You?

When it comes to long-term care planning, an equity release mortgage can be extremely useful. However, they’re only viable options for those who want to fund care in their own homes through either hourly care Guildford or live in care Surrey and also for those who don’t qualify for local authority support. 

Furthermore, equity release mortgages are not suitable for those who plan on moving into residential care soon, as you’d be required to repay the loan in full as soon as you move in permanently. 

How Much Equity Could You Release?

The amount of equity you’re able to release is based on numerous factors, such as how much your home is worth, your age and the type of equity release mortgage you choose. 

Additionally, some providers may be able to offer larger sums of money to those with certain medical conditions, or even ‘lifestyle factors’ such as a smoking habit.  

Other Things to Consider 

As your main goal in releasing equity safely is to fund homecare, think about whether an equity release mortgage will be able to cover the full costs of your hourly care Guildford or live in care Surrey or manage to only pay for a part of it. 

If an equity release mortgage only pays for part of your homecare for a limited period of time, you’ll need to consider how you’ll meet the remaining costs. 

Therefore, in order to meet all your homecare payments, you should estimate the full cost of your homecare prior to making a decision regarding the funding. Remember to also consider the possibility of a more intensive care requirement in the future.

Advice from Bespoke Home Finance

There’s a plethora of differing equity release mortgages available, which is why we strongly recommend that you contact us for transparent advice before you choose one. 

Learning more about equity release mortgages and weighing up the different options with an expert can lower the risk of overpaying or losing out, both now and in the future. Find out more about equity release mortgages for your homecare needs here.

At Bespoke Home Finance, our client base covers across the UK and we are very proud of the work we carry out for them. If you’re interested in other mortgages or insurance, check out the rest of our services.  

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