Daniel and Julie need to release some equity from their property

Daniel and Julie are both 77 years old, retired and own their own home in a private estate in Angmering. Their house is worth around £700,000 and they also have a Buy to Let Property worth around £250,000. They have one child, their daughter, Sally, who is currently going through a divorce.

Their Objectives

Due to the divorce Sally has left her own home and will need to buy a new house. Daniel and Julie wanted to help Sally with this by releasing some equity from their property. They have also found that their own cash reserves have run low as they have been enjoying travelling in their retirement. They would like to top up their cash reserve for future expenditure.

We discussed the option of Daniel and Julie downsizing, however they would like to stay in their current home. The property has been the family home for most of their life and they are both very fond of the house and garden.

We also discussed the option of selling the Buy to Let Property, but they like the regular income this gives and there would be a large Capital Gains Tax Charge on the property if they were to sell.

The Solution

As they did not want to sell either of their existing properties, Equity Release was the most suitable solution. The product they have taken out will give them £275,000 to spend as they wish. Daniel and Julie were keen to have a fixed interest rate on the Equity Release loan for the lifetime of the mortgage.

We managed to find a company offering a fixed rate of 3.96% which will be fixed for the lifetime of the loan. Any interest will be added to the amount borrowed and will be repaid either when Daniel and Julie decide to downsize or the second person dies.

Please note the above case study is based on a real client seen by our advisers, however all names have been changed for confidentiality. This case study forms a summary of advice and before taking out such products we recommend taking independent financial advice as everyone’s situations are different.

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