EQUITY RELEASE WITH HIP
HOW DO EQUITY RELEASE SCHEMES FUNCTION?
When people talk about equity release, they’re usually referring to accessing the equity which is tied up in their home. This comes in the form of a lump sum or an income stream and is normally only available to homeowners over the age of 55. Anyone signing up to an equity release must agree that the lender will be repaid at a later stage. In this situation, it is normally when the homeowner dies. For some people, this a good way of accessing cash.
A few of the most common equity schemes available on today’s market include:
HOME INCOME PLAN:
What are the disadvantages and advantages of equity release?
Unsurprisingly, there are pros and cons with the traditional equity release models. If you’re looking into withdrawing equity from your home using banks, insurance companies or mortgage lenders, you will need to look closely into whether it’s right for you and your family in the long term.
They provide a source of income
You have access to a cash lump sum, tax-free, or an annuity for the rest of your life.
You are protected in case of negative property price fluctuation
Equity release schemes carry a no negative equity guarantee to protect you in case of a property price slump.
Lower inheritance tax
The amount of inheritance tax can be reduced, however there is less for your loved ones to inherit.
In some schemes, you can stay in your home without making any repayments until your death.
Can be very expensive
Traditional equity release schemes can be an extremely expensive way of accessing cash.
Your family will inherit less
The amount left to your family in the form of inheritance in the event of your death will more than likely be significantly reduced.
Negative effect on benefits
It can affect any benefits the borrower is receiving.
Strict restrictions apply
There is a rigidity to traditional equity release, with overpayment fees and/or restrictive contracts.
HOW HIP APPROACHES EQUITY RELEASE?
There is an alternative to the traditional banking models. HiP has a radical new way of releasing equity. The way we see it, your mortgage should be treated like a bank account. At any point in the day, you can add or withdraw money from your current account. Why can’t your house work in a similar way?
HIP LIKES TO DO THINGS DIFFERENTLY
HiP is the world’s first regulated property platform where owners can access their property wealth just like a bank account. Investors participate in interchangeable debt and equity… all in real time. We allow you as a homeowner to access your equity quickly and easily. After all, this is your property wealth.
Here are some of the ways HiP makes equity release beneficial to you:
Your property equity is added month by month – which you can track on an easy to use app. You can access it all, or take a little bit – it’s completely up to you. You can pay your equity back over a timeframe or whenever you are in the position to do so. You can increase your monthly repayments or get investment, helped by us, for a lower rate. You are never penalised for late payments or payment holidays.
AND THERE’S MORE…
HiP has a willing network of investors who are ready to fund your property, either via their own property wealth or with their own investment funds right now. You pay them back monthly.
HOW YOU BENEFIT WITH HIP
HiP is the NEW Way
to finance property
Reinvent the way you look at property investment
HiP is hugely beneficial to property owners, changing the way we can use bricks and mortar into something with far more fluidity than ever before. It is a debt and equity exchange, with investors all over the world interested in putting their money into property.
Turn Your Property Into a Bank Account
For you, this means a democratised property market; withdraw money from equity without moving, borrowing or losing ownership, use your equity to cover your monthly mortgage repayments, or trade your equity against your mortgage.
Flexibly in the high-yield property markets without limits
We allow you to do all this, and much more, without the penalties, costs and charges that a traditional lender would impose. Whatever your property investment or finance needs may be, HiP is on hand to help you take your next step.
HiP UK will be regulated by the FCA*
And have an agreed licence for trading in the UK and Europe. *As we go live these permissions are being reviewed.
HiP UK is based in London.
HiP's 20+ staff operate from Camden, London. With registered address in Bristol.
HiP is award winning
We have won an awards and been shortlisted for more. We came second in the worldwide PropTech Innovation Awards and as Bronze in the Digital Impact award 2017 for “Best use of digital by sector”.
What people are saying about HiP
HiP is creating a buzz in the property world, but especially in the first time buyers market.
"Hip has incredible potential. It brings accessibility and transparency to the property market for owners, occupiers, investors and developers, and allows them to take control and leverage the balance of their debt to equity to their own advantage."Paul Danks,
“HiP could solve the UK housing crisis”
"It’s a game changer, and a very exciting one."Sophie Eastwood,
Register your interest
Just fill out the form on this page now, and you’ll be the first to find out about HiP, which we are busy creating. We can’t wait for you to join the property revolution.
Frequently Asked Questions
WILL EQUITY RELEASE AFFECT MY BENEFITS?
More than likely, yes. Means-tested benefits like pension credits and council tax benefits will certainly be affected.
There are services online to see what benefits will be affected and by how much. It’s an important aspect to consider, especially if you’re considering a scheme which allows you to draw down, thus adding to your monthly income.
WHAT ARE THE DOWNSIDES TO DOING A REVERSE HOME MORTGAGE?
Often, the process of arranging a reverse home mortgage will include costly upfront fees like application fees, monthly service fees and closing costs – which applicants could find difficult to pay.
A reverse home mortgage will also affect any pension credits and other benefits which you receive from the government. It’s important to see to what extent before applying.
WHY ARE REVERSE HOME MORTGAGES USUALLY THOUGHT OF NEGATIVELY?
While some homeowners consider reverse home mortgages as beneficial, there have been many reports in the press on the downsides of the schemes.
Many consider the over-55s as a largely vulnerable demographic to target a loan plan with a long-term commitment at. There is also the complicated small print, which some applicants might miss, but could have severe ramifications should they choose to alter their loan plan in some way.
WHAT CAN EQUITY RELEASE BE USED FOR?
When you enroll on a 55+ equity release scheme, you are free to do what you want with the money you receive, whether it’s a lump sum or an annuity.
WHAT ARE THE ALTERNATIVES TO EQUITY RELEASE TO TAKE INTO ACCOUNT?
There are a number of alternatives to equity release that are well worth considering.
Downsizing to a smaller home is popular. This way, you can benefit from the equity of your home by selling it, but also have the benefit of investing some of it into another property that you can call your own.
WHO REGULATES HOME REVERSION PLANS?
After a full public consultation amid reports of unscrupulous salespeople taking advantage of elderly homeowners with home reversion plans, the FCA were put in charge of regulating these schemes in 2004.
HOW DO I ACCESS MY EQUITY FOR CASH?
Simply by selling your disposable equity via the HiP platform. You simply put the amount of equity or %-age of equity you want to sell on the HiP exchange where investors will see your offer and either accept it or negotiate the price before completing the trade.
WHAT IS LIFETIME MORTGAGE?
Lifetime mortgages are the popular form of equity release. The borrower takes out a loan and the house is used as collateral. Compound interest is added to this amount, and the whole amount gets repaid when the homeowner moves into long term care or dies. This is usually paid through the sale of the property.
EQUITY RELEASE SCHEMES GOOD OR BAD?
One the plus side, equity release schemes allow you to live in your own home for the rest of your life, as well as provide a lump sum or regular income.
One the negative side, equity release schemes will reduce the amount of money you leave as inheritance, as well as affect any benefits you may receive from the government.
ARE REVERSE HOME MORTGAGES A SCAM?
There are a lot of stories in the press relating to elderly signing up to reverse home mortgage schemes that they didn’t completely understand or research. A large percentage of the over 55s (which equity schemes are aimed at) are vulnerable, and are therefore an easy target for equity release schemes.
CAN EQUITY RELEASE BE REPAID BEFORE DEATH?
In theory, yes, but at a great expense. Equity release schemes are intended to be long term commitments, not short term loans. This means that the loan and any interest it accrues will be paid either when you move into long term care or in the event of your death.
HOW MUCH WILL EQUITY RELEASE COST ME?
Equity release is notoriously expensive – but the flipside is that the expense doesn’t need to be a worry, as it is dealt with after your passing.
However, it is important to get a hold of the figures, and the amounts will differ depending on the various plans on offer.
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