Here we answer some of your most frequently asked questions about equity release:
When would the plan need to be repaid?
Can I transfer my plan to an alternative property?
How much money will I owe the provider when the plan finishes?
How much money can I borrow via an equity release plan?
Who would be responsible for the maintenance of my home?
Could entitlement to means-tested benefits be affected?
What impact would changing house prices have on my plan in the future?
What impact will equity release have on my on inheritance tax liability?
Will I still be able to leave an inheritance?
Would I still own my home?
What fees are involved in setting up a plan & when must they be paid?
Can I lose my home?
How long does an application take to complete?
How do I contact CCCS Equity Release Limited?
When would the plan need to be repaid?
The outstanding amount on a lifetime mortgage / interest only lifetime mortgage is repaid from the proceeds of the sale of your property, either on death (with a couple on the death of the last survivor) or following a move into permanent long-term care.
With a home reversion plan the property will normally be sold on death or following a move into permanent long-term care. The home reversion provider will retain their percentage of the sale proceeds in accordance with your agreement and the remainder will pass to your estate. Back to top
Can I transfer my plan to an alternative property?
All SHIP (Safe Home Income Plan) approved plans are portable. This means they can be transferred to a new property, subject to the approval of the plan provider. Back to top
How much money will I owe the provider when the plan finishes?
Home Reversion Plan
When the property is sold the provider will retain the percentage of the sale proceeds as agreed at the outset of the plan. For example if you originally sold 40% of your property to a provider, then they will retain 40% of the sale proceeds when the house is sold.
As we cannot predict the future value of your property, we cannot predict the exact long-term cost associated with this plan. Property prices could be higher or lower than they are today.
Lifetime Mortgage
The amount payable will be the initial amount borrowed plus the interest accrued during the life of the loan. Your adviser should provide a Key Features Illustration confirming exactly what will be owed each year for the rest of your life before you proceed.
Interest Only Lifetime Mortgage
Providing you have maintained your monthly repayments for the duration of the plan, you will only be required to repay the original amount borrowed when the mortgage ends.
All SHIP (Safe Home Income Plans) plans carry a ‘no negative equity guarantee’. This means that the amount owed can never exceed the value of your property. Back to top
How much money can I borrow via an equity release plan?
Home Reversion Plan
The amount you can borrow depends on the value of your property, percentage of the property sold, age, sex, health and whether you are single or a couple. The older you are when you start the plan the more you will usually receive for the share of your property sold.
Lifetime Mortgage and Interest Only Lifetime Mortgage
The amount you can borrow depends on the value of your property, your age and sometimes health. The older you are the greater the cash sum that can be released.
Most providers will release a set percentage based on your age., for example, a 60 year old could release 20%, a 65 year old 25% and so on. The amount available varies between providers. Back to top
Who would be responsible for the maintenance of my home?
With both home reversion plans and lifetime mortgages you are responsible for the maintenance of your property to a reasonable standard. Back to top
Could entitlement to means-tested benefits be affected?
Yes, depending on the amount borrowed and purpose of the release.
Your CCCSER adviser will complete a full benefits assessment before making a formal recommendation. We will discuss the impact an equity release plan may have on any means-tested benefits you receive now or are likely to receive in the future. Back to top
What impact would changing house prices have on my plan in the future?
Home Reversion Plan
You and the home reversion company share any increases or decreases in the value of your property. Your exposure will only be on the share of the property you have retained.
Lifetime Mortgage & Interest Only Lifetime Mortgage
You retain the full benefit of any increases in the value of your property. If the value of your property falls, the amount of capital available after the loan has been repaid will also decrease.
All SHIP plans carry a ‘no negative equity guarantee’, the amount owed can never exceed the value of your property. Back to top
What impact will equity release have on my inheritance tax liability?
Home Reversion Scheme
A home reversion plan could reduce your inheritance tax liability, as the proportion of the property you sold would fall outside your estate for tax purposes.
Lifetime Mortgage & Interest Only Lifetime Mortgage
A lifetime mortgage could reduce your inheritance tax liability as the amount outstanding on the loan is deducted from the value of your estate before your tax liability is calculated. Back to top
Will I still be able to leave an inheritance?
Home Reversion Plan
If you sell your entire home then there would be no cash due from the eventual sale of the property. However, if you only sell part of your property then the value of the share you retained could be used to provide an inheritance.
As we cannot predict the future value of your property we also cannot predict the amount that could be available as an inheritance. Property prices could be higher or lower than they are today when the property is eventually sold.
Lifetime Mortgage & Interest Only Lifetime Mortgage
The amount of inheritance available will be the difference between the proceeds from the sale of the house and the amount outstanding on the loan when it’s redeemed.
If your plan has a lifetime fixed interest rate you have the certainty of knowing exactly what your future debt will be. What we cannot predict is the future value of your property, property prices could be higher or lower than they are today when the property is eventually sold. Therefore we cannot predict what inheritance will be available. Back to top
Would I still own my home?
Home Reversion Plan
The deeds and therefore ownership of the property would be transferred to the home reversion provider.
You would retain a beneficial interest in any part of the property not sold to the home reversion company.
Lifetime Mortgage & Interest Only Lifetime Mortgage
You maintain 100% ownership of your property. Back to top
What fees are involved with setting up a plan and when must they be paid?
There are four main costs associated with setting up any equity release plan.
- Survey Fee – This is payable at the start when you submit your application. The amount usually depends on the estimated value of your property.
- Application Fee – This is payable directly to the equity release provider when your plan completes. This can either be paid from the funds released or added to your loan. This fee is typically £695.
- Legal Fee – All SHIP (Safe Home Income Plan) members insist that you receive independent legal advice from a solicitor. Your solicitor should offer a fixed fee for this service of between £400 and £500.
- Advice Fee – CCCS Equity Release Ltd does not charge an advice fee. Typical advice fees can vary between £595 and £2,000. Back to top
Can I lose my home?
Providing you adequately maintain your home and fulfil the terms of the agreement, SHIP members guarantee lifetime tenancy in your property regardless of what happens to future interest rates, property values or investments. Back to top
How long does an application take to complete?
The time taken to complete an application varies depending on each applicant’s individual circumstances.
Typically you should allow 4 – 6 weeks from the time you submit your application. All funds will be released directly to your solicitor. Back to top
How do I contact CCCS Equity Release?
Telephone 0845 074 2987 or email equityrelease@cccser.co.uk. We are open Monday to Friday 9am to 5pm. Back to top