Equity release case studies

Equity release - Lifetime mortgages

John Hart, 68, decided to release equity from his home because he believes in enjoying life. He took out a fixed interest rate lifetime mortgage.

"Why should I leave money for my family to squabble over?" he asks. "I have lots of relatives and they all have wealth of their own. With the money I released, I have travelled all over the world and made lots of improvements to my property, such as installing new central heating and a modern shower."

John says now he would recommend equity release to anyone, and has repeatedly recommended it to his sister, but he didn't always feel that way. "I was very apprehensive at first and it took me about a year to decide to do it. I looked around carefully at the market, and chose the lender which agreed to lend me the exact amount I wanted. They encouraged me to get advice and made sure all the information they gave me was perfectly clear, including the amount of fees I would have to pay. I discussed it all with my family and have decided to leave the remaining equity in my property to charity."

John's advice: Use a lender that is a member of Safe Home Income Plans (SHIP), which is an organisation dedicated entirely to the protection of equity release policy holders.

Equity release - Home Reversion plans

Last year, Arthur Eaton, 71, and his wife Lillian, 69, were struggling to make ends meet. The couple have no children and, when faced with the choice of moving out of their Lincolnshire bungalow or releasing equity from their home, they decided to go for the latter, and took out a home reversion plan with Bridgewater.

"We didn't want to move home because 14 years ago, I was involved in a car accident and so I couldn't manage a property with stairs," explains Arthur. "Our bungalow is only a few minutes from the sea. We love living here and we've worked hard for years to buy this house. So we thought: why not make the house work for us?"

He found an independent financial adviser online and says the experience very smooth. "I couldn't believe how simple and easy it was. Bridgewater was fantastic to deal with and the payment they offered me was much better than the competition. My solicitor also helped me a lot and guided me through the process. I had almost nothing to do," Arthur confides.

The couple sold 100 per cent of their property and the money allowed them to buy a car when their old one broke down. They are keeping the rest of the money in the bank so that they are able to go on holiday at a moments notice. "It has given us absolute freedom and independence," confides Arthur. "It's also nice for us to know that, whoever dies first, the other will be looked after. That's partly why we went for a home reversion plan over a lifetime - it means everything is already sorted and we don't have to worry about a thing. We've got our lives in order."

Arthur's advice: Make sure you deal with the right people. Ask your solicitor to check that your equity release provider is a reputable firm and choose a qualified adviser.

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