What happens with equity release if I go into care? And can I use equity release to pay for care? These are just 2 of the questions we’ll answer in this article. Read on for more information.
What happens with equity release if you go into care?
All equity release plans are structured to allow you to continue residing in your home until your passing, or until you are unable to live there any longer, for example because you move into long-term care. If the need arises for you to move into long-term care, and you are the last owner of the property who is entitled to live in the property, the house will be sold to repay the equity release lender and any balance after the equity release is repaid will be given to you or your estate as per any instructions in either your Will or a Lasting Power of Attorney.
Can I use equity release to pay for care at my home, known as domiciliary care?
The costs associated with moving into care and care homes can be substantial, making it difficult for some people to afford the fees or wish to pay the high costs. In this instance, homeowners sometimes decide to release equity so that they can stay in their home known as domiciliary care. Remaining in your home is guaranteed with all equity release plans that are endorsed by the Equity Release Council. This may then allow you to pay for private medical care at home, carry out home adaptations to enable you to live at home, and or pay for assistance at home so that you can be cared for or certain tasks can be done to enable you to stay in your home.
How does equity release affect care home fees?
Whether you require assistance at home, need to cover your partner’s care home expenses, or plan to make modifications to your house, equity release is an option for homeowners, especially when you have limited funds of your own. However, it’s imperative to seek guidance from a financial adviser who is an equity release specialist before making any decisions so that they can go through all the advantages and disadvantages and discuss your requirements in more detail.. They can assess your financial situation comprehensively, explore various options, and assist you in finding the most suitable solution tailored to your specific needs and circumstances, which may not be equity release.
Can I use equity release to avoid care home fees?
No. Equity release agreements require full repayment if you transition to long-term residential care. Any remaining balance can be used to cover your care home fees as can any savings.
Does equity release affect care home fees?
Equity release plans refer to agreements exclusively entered into by a homeowner or homeowners, that is the individuals listed on the property deeds and the land registry office. Anyone can be added to a plan or taken off providing this is done by a solicitor. Should the last homeowner transition to long-term care, the agreement concludes, and the equity release is repaid from the sale of the property, or repayment of the lifetime mortgage by beneficiaries.
Although equity release offers immediate funds for care home fees, it is crucial to consider the long-term consequences. Opting for any equity release reduces the value of the estate and money available for long term care. It also reduces money that you could leave as inheritance to your family or beneficiaries. Lifetime mortgages where interest is not paid and is compounded means that the balance will build over time, reducing the estate’s value. If someone with an equity release requires to move into a care home, they will need to repay the equity release loan, usually necessitating the sale of the home.
For further information or if you have any questions, feel free to get in touch with Bower on 0808 169 8316. Alternatively, you can request a callback, send us an email, or message us through the live chat on our website.
At Bower, we will understand your unique circumstances and advise you to ensure you are receiving the best plan to meet your objectives. There are plans that allow you to make voluntary repayments and move home, subject to lender criteria. However, early repayment charges may apply in certain circumstances.
Equity release requires paying off any existing mortgage. Any money released, plus accrued interest to be repaid upon death, or moving into long-term care. Equity release will reduce the value of your estate and your entitlement to means-tested benefits now or in the future, and impact long-term care funding.
Bower Home Finance provides independent, impartial whole of market advice with an award-winning customer service experience. Initial advice is provided at no cost to you and without obligation. Only if you choose to proceed and your plan completes, would a typical advice and administration fee of £1,495 be payable.
If you are considering equity release, we strongly recommend that you read our equity release page carefully and talk to one of our specialists before deciding if you wish to proceed.
To find out more about any of the products and the service we provide, please call us on freephone 0800 411 8668, request a call back, email us, or join our live chat you’ll find on our website.
Please be aware that equity release may involve a home reversion plan or lifetime mortgage which is secured against your property. All features and risks are thoroughly explained in your free personalised illustration.
