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Equity Release

What is equity release?

Equity Release helps homeowners release capital tied up in their home without the need to take out a traditional mortgage. Depending on your age and the value of your property you can choose how much equity to release. The released capital is in the form of cash and you are therefore free to choose what to do with it.

Unlike a traditional mortgage, with equity release no repayments are made until death or if you move into long term care, in which case the house is sold and the loan repaid. With equity release there is no standard plan, all of them are slightly different as it is a complex financial tool. As discussed above, your age, the value of the property, where it’s located, in what state of repair, and many other factors all have to be considered.

Benefits of equity release

For many elderly homeowners the benefits of equity release outweigh the negatives, one overwhelming benefit of equity release is brought about by rising property values over the last several decades. However on one hand it is likely your home has increased in value significantly. But on the other, the capital increase is tied up and doesn't filter through in hard cash.

Before equity release schemes the only real way to get the built up capital out of your home was to sell and move down the property ladder. But this causes problems because many people viewed their property as more of a home, perhaps becoming attached to both it and the surrounding area over the years.

So the real benefits of equity release is that nothing changes. You still live in your home but the money released can help to provide a retirement income. However, equity release schemes are not right for everyone. The disadvantage is that they’re often inflexible and somewhat expensive. It is therefore advised that prospective applicants look at and explore other ways of raising cash.

Understanding how equity release schemes work

Older people living in their own homes are finding the present financial climate particularly hard to bear. They should be enjoying their twilight years – instead, they are struggling to make ends meet.

They don’t realise the answer is all around them - equity release is the ideal way to release the capital invested in your home, without having to move out. With home equity release, nothing about your living conditions change except your ability to enjoy them a little more.

At Decision Homebuyers, we offer easy and manageable equity release schemes that allow you to enjoy some of the cash you worked so hard to invest all those years ago.


How does home equity release work?


When homeowners need to raise capital, the obvious way is to take out a loan. But this is not an option for many elderly people. For them, equity release schemes are the obvious answer.

With equity release, the capital locked up in their homes is released, giving them a cash sum to do with as they please. The first stage of home equity release is a valuation of the property. People, whose mortgages were paid off years ago, are often amazed their homes are worth so much.

Types of home equity release

Most people think of equity release schemes as a type of loan, in which a cash amount is released from the value of the property, to be repaid when the homeowner dies - normally, through the sale of the estate.

Depending on the company involved, this can be very inflexible, and interest rates can be sky high. At any time, the loan can be called in - causing anguish and hardship.

Although homeowners imagine they can leave their house to their children this way, it rarely happens.

Why are Decision Homebuyers equity release schemes so good?


We at Decision Homebuyers offer another solution - we buy the property for cash, and then allow the homeowner to remain as tenants.

In this way, they obtain full equity release which they can use any way they want - it can even be reinvested.

If they have to leave, it’s a simple case of ending the tenancy. They are not tied into remaining in the property, and the equity released from the sale can be used to pay nursing home fees.

Does equity release mean there is no estate left after death?

Once, it was common for parents to leave their home to the next of kin in their will - simply because home ownership in general was so uncommon.

However, things have changed. Children have properties of their own. Generally, when an estate is realised the home is sold and the proceeds divided equally.

It’s a sad fact that many old people do not die in their own homes. Instead, the property is sold to pay nursing home fees. Home equity release allows them to enjoy their investment while they can – seeing their twilight years out in comfort, with a lump sum in the bank.

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