When it comes to senior homeowners, equity release may be a means to access the money built up in their houses over the years. However, what happens if you decide to relocate after you have taken out a plan?

After getting an equity release plan, you should still be able to sell your current house and purchase a new one, regardless of why you are moving; however, there are a few things to consider that you need to be aware of before doing so. In the following paragraphs, we will discuss all you need to know about selling your house through equity release.

Why You Might Sell Your Home With Equity Release

Equity release is offered to senior homeowners over the age of 55. However, even though many individuals will be trying to wind down at this time of life, circumstances may change, and many homeowners in their later years may opt to relocate after realizing they have equity in their property.

You may become sick of city life and relocate to the seaside. On the other hand, you may have grandkids and want to be closer to your family. Alternately, the family house you've lived in for years may become too large for you as you grow older, making sense to downsize to a smaller property.

How Selling A Home With Equity Release Works

If you bought your plan from a company member of the Equity Release Council, then your lender needs to let you shift to a "suitable alternative property." This indicates that it will need to evaluate the new property you are purchasing the same way it evaluated your existing house when you first took up your equity release plan. This is large to validate its worth and assure that there will be no issues selling it on the open market when the plan ends.

Equity release providers are likely only to accept specialized retirement properties, which is just one of many reasons why it is crucial to give equity release and all of its possible repercussions a lot of serious thinking before you take out a plan. This is one of many factors before committing to an equity release plan.

If your equity release provider thinks the property you want to purchase is a good fit for their program, they will gladly move the insurance to the new location with no problem. This practice is referred to as "porting." The specifics of how this works for you will be determined by the sort of plan that you have.

As the most popular form of equity release, a lifetime mortgage entails relocating the debt from one property to another. However, there is one caveat that could arise. Suppose the value of the new property is lower than that of the old property. In that case, the lender may require you to prepay a portion of the loan using the proceeds from the sale of the old property because the loan amount now exceeds the lender's maximum borrowing limits. That's the only possible caveat.

Who Can Port My Equity Release For Me?

If you want to move your equity release plan from one property to another, you will need to consult a specialized equity release expert, just as you did when you first obtained the plan. Only then will you be able to do so. They will direct you to the kinds of houses that will be acceptable to your equity release provider, and they will also assist you in determining whether or not moving forward is the best course of action for you.

Are There Alternatives To Porting My Equity Release Plan?

In certain situations, your advisor may propose utilizing sale proceeds to repay existing lifetime mortgage and take up new one. The benefit of this technique is that you can acquire a reduced interest rate or, perhaps, a more up-to-date plan.

The drawback is that it will be slower than moving your number over to your current carrier. There may be additional costs, such as fees for making an early repayment on your existing policy, in addition to any and all set-up fees connected with getting a lifetime mortgage, such as getting legal counsel. Your advisor needs to be able to compute the potential expenses associated with each alternative to assist you in making the best decision.