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jargon
buster crown
equity release
Discounted cash sum
Understanding why you are not receiving 100 pence for every £1 worth of
property you are selling can be difficult. However, in order to continue living
in the property you do not need to pay rent, which on average would be
equivalent to 5% per annum of the property's value, e.g. on a typical £150,000
property rent would equate to £625 per month (£7,500 per year).
Equity
The value of your property in excess of any amount owed on a mortgage or
other loan secured against it.
Equity Release
Unlocking equity in your home in return for a cash lump sum, a regular
income or a combination of both.
Estate
The value of your assets, including all savings, possessions and property.
IFA
An Independent Financial Advisor (IFA) is someone who can explain and help
you understand the benefits of equity release. They will provide advice on
comparative plans from different companies. At Crown Equity Release we prefer
to work together with IFAs.
Inheritance Tax
A tax payable on the value of your estate after you die. The threshold is
set at £263,000 (2004/2005), if your estate is worth more than £263,000 you are
liable to pay tax on the amount above this.
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Investor or Investing Company
The reversionary interest on your property will be owned by a Public
Company (plc), a private investment company, family trust or an experienced
individual investor.
Lease and Agreement
The legal documentation comprises of a lease
and an agreement between you and the investing
institution. The Lease allows you to remain in
your home (or another property if you wish to
move) until the death of the surviving partner;
at this point the lease is automatically surrendered.
The Agreement says that the investor will not
interfere with your right to enjoy the property
without disturbance as long as you continue to
maintain the property to a reasonable standard
and that you will pay for buildings insurance
and community charge (just as you do now).
Negative Equity
Negative equity is where mortgage and loans secured on your home exceed the
market value of your property. With a good equity release plan you will have a
no negative equity guarantee ensuring your family will not be left in debt.
Valuation
A qualified valuer will inspect your property and prepare a report that
will outline the condition your property is in, what the value of your property
is and what the property should be insured for.
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