Can I release equity if I am self-employed?

Can you get equity if you are self-employed, and if so, what options are available? Mark Gregory helps the reader who works as an advisor navigate the lifetime mortgage market

Subscribe to our newsletter

Question

My wife and I own our property with three years left on the mortgage. I am now 58 years old and until I was 55 I worked for a large company. After being made redundant, I made the decision to work as a consultant and remain self-employed to this day.

Work-related things are up and down so I’ve been thinking about freeing up money from the estate to support living costs. We’re not ready to downsize because we still have teenage kids. But will my status as a freelancer affect my equity release request and are there products for people in my situation?

Mark’s answer

Thank you so much for your question, and yes – being self-employed does not in itself prevent you from obtaining equity. You don’t need to be retired, and there are lifetime mortgages that can accommodate your fluctuating income.

A Lifetime mortgage It is a loan secured by your home that allows you to release cash tax-free while maintaining ownership. For a plan without mandatory monthly payments, borrowing is based primarily on your age and property value, not on your earnings. Your advisor will continue to review your income and expenses to determine if it is right for you.

Typically, you and your spouse must be at least 55 years old, and the property must be your primary home and meet your requirements. Lender criteria. When you turn 58, you meet the usual minimum age, but your spouse’s age must also be taken into account.

One option worth exploring is a Lifetime mortgage withdrawal. This allows you to receive an initial lump sum and access additional amounts from the agreed reserve when needed, subject to the terms of the plan. Interest is only charged on the money you withdraw, which can help manage borrowing costs compared to taking everything up front.

Flexible payment features may also suit your circumstances. You can choose to make voluntary payments during stronger trading periods and do nothing when income is calmer. These payments can help limit balance growth, although repayment allowances and any early repayment fees should be checked.

Your existing mortgage must be repaid when the Lifetime Mortgage is completed, either from the proceeds or from other available funds. This will reduce the remaining cash if you use the proceeds, but eliminating your current mortgage payments may also ease the pressure on your monthly budget.

However, with only three years left on your mortgage, it’s especially important to compare the cost of replacing it with borrowing that could last for decades. Your advisor should explore whether you need support during occasional lulls or face a persistent gap between household income and expenses, and how long any funds released will last. They should also consider alternatives, including discussing options with their current lender.

If you don’t make any payments, interest is added to the loan and additional interest is charged on the increased balance. This could significantly increase the debt and reduce the inheritance you leave. Equity liberalization may also affect entitlement to means-tested benefits. For a joint lifetime mortgage, the loan is usually repaid when the last borrower dies or transitions into long-term care.

our Independent advisors to the issuance of shares It can help you and your spouse evaluate your options, taking into account your family obligations and future plans. Calls 08008021015 Talk directly to an advisor without going through a call center.

The initial consultation is free and without obligation. Our consultation fee is only paid if you follow through with the recommendation and your mortgage is completed. Your advisor will explain any other costs before you decide.

They will be happy to explain everything in more detail and talk to you about the features, benefits and risks of a Flexible Lifetime Mortgage, as well as any alternative options that may be available to help you raise the capital you need.

Meet our expert…

Mark Gregory, Founder and CEO Supermarket stock issuehere to answer your questions. Mark is himself a consultant with over 20 years of equity issuance experience.