If you own your home, equity release is one way to fund retirement years. Gibson Kerr is a family-run law firm based in Edinburgh. Contact us today on 0131 208 2260.

As a population we are living longer. This means retirement now affords opportunities to pursue the hobbies, activities and interests that we did not have time for whilst working. Unfortunately, many people's pensions and savings are not adequate to allow them to spend their time as they please.

For most people, the biggest asset they hold is their home. Equity release provides a way for you to release some of the value that is locked in your home, making your retirement more comfortable. In addition, you do not have to move home to realise some of the capital your home holds.

What is equity?

Home equity is simply the market value of your home less any debts secured against it. The value that is left is the 'equity', and it is this value which you will be releasing. In addition, you will not have to move out for your home to realise this amount.

Equity release will give you a tax-free lump sum, a regular income or a reserve to borrow against. How much you can release and for what purpose depends on your age, how much your home is worth and which type of plan you choose.

Equity release schemes

There are two main types of equity release plan:

• Lifetime Mortgages

This type of plan is similar to a mortgage but with no repayments during the borrowers lifetime. Instead, the cost of the mortgage and interest is met out of the deceased's estate. The equity sum can be taken in one lump sum or a series of scheduled payments. The amount left is distributed according to the deceased's will.

• Home Reversion Plans.

Home reversion plans essentially transfer the home to the lender. The borrower retains the right to stay there, but on death, the title to the home transfers to the lender. In general, no value is left to the deceased's estate. Some plans allow a portion of the value of the house to borrowed against, rather than the whole.

For advice on which type of plan is suitable for you, contact our equity release solicitors on 0131 208 2260.

Legal Advice on Equity Release in Scotland

For further information on equity release, please do not hesitate to contact our solicitors based in Edinburgh in Scotland on 0131 208 2260.