Can I take equity from my house?

Yes, if you meet certain criteria, you can take equity from your house by borrowing cash against the value of your home. 

You can do this by either remortgaging your home through a Lifetime mortgage or through a Home Reversion scheme. You may wish to do this, as it provides tax-free money in the form of a lump sum or through regular payments so that you can:

- repay short-term debts

- start a business

- make home improvements

- help your children to buy a home

- have extra income to supplement your retirement

Mortgage equity is the difference between what you owe on your mortgage and the current value of your house. 

So, if your house is worth £250K and you have a £100K mortgage left to pay, you have equity in your property worth £150K.

The advantage of equity release is that it frees up equity you have tied up in your home while you can still continue to live there. This can be done as long as you fulfill certain criteria, which are dependent on the lender, but generally tend to be the following:

- you are  over 55 years old 
- your home is worth more than £70K and is in fair condition
- you own the house and have lived in it for more than six months

You can do this in two ways through a lifetime mortgage or a home reversion scheme. If you meet the criteria and decide to release equity in your home it is important to speak to a mortgage adviser or finance expert first.

Remember that it doesn't always suit everyone to go down the equity release road because it may have long-term implications for both you and your family. For instance, it could sharply reduce the amount of inheritance you could otherwise pass on. Also, if you haven't paid off your property and decide to release equity, you could see increased interest rates and owe more money on your mortgage. This could result in you taking a longer period to pay it off, and overall paying more interest. 

It is also worth noting that if house prices fall and you find yourself in negative equity, it means your loan becomes larger than the total value of your house.

The whole process can take several weeks to complete as the title deeds need to be changed in relation to which lender has a charge on the property. 

Your home will also have to be valued by a surveyor to calculate the current market value. Taking note of all these considerations, it is important to make sure that you get sound advice before opting to release the equity in your home. 

If you need advice on how to release equity from your property, we have a team of reliable conveyancing solicitors on hand to help. Please do not hesitate to contact us today. Complete our enquiry form.