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Lifetime Mortgage & General Equity Release Advice in Exeter
Reviewed by Tom Philips
Get in touch today on 0330 058 1579 for a free, zero obligation consultation. We can help you locate equity release advisors in your local area.
If you bought a house in Exeter a number of years ago, then you will have noticed that your house has increased in value significantly since you first bought it.
In fact, most house prices across the UK have increased in value significantly over the past decade. This is why more and more people are considering equity release in Exeter and throughout the rest of the UK.
The UK House Price Index [1] found that the average house price across the UK was £295,000, which was a £28,000 increase in just 12 months [1].
However, according to Rightmove, the average house price in Exeter is over £300,000, with some detached houses being valued at as much as £435,000 [2].
As you can imagine, if you bought a house in Exeter decades ago, then you will be reaping the rewards now.
This is why more and more people across Exeter are considering equity release as an option. If your house has increased in value since you first bought it, then you will have a significant amount of equity in your home sitting, waiting for you.
If you couple this with paying off your mortgage, then equity release could be the ideal option for you.
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Equity release Exeter is a form of loan. Unlike with other loans, you do not have to repay your loan until after you pass away or move into a care home.
In return for taking out an equity release loan, you will be given access to the money that has built up in your home over the years.
This equity is a combination of your monthly mortgage repayments, your initial deposit and the amount your property has increased in value.
There are two major types of equity release Exeter and throughout the rest of the UK. Lifetime mortgages are by far the most popular option for anyone aged 55 or over, and home reversion plans are available to anyone aged over 65 years old.
You do not have to repay your equity release loan until after you pass away or decide to move into a care home for your health.
This allows you to spend your equity release loan however you want to! You’re free to spend your money on whatever you want, whether that is home improvements around the house, a family holiday or just a better lifestyle.
Others choose to use their equity release money to help loved ones in need. For example, some people choose to pay for their children or grandchildren’s weddings, university fees or house deposits.
Whilst you do not have to repay your loan until after you pass away and your house is sold, you will be charged interest every week you are alive. If you live for many years, then this interest will quickly grow into compound interest, which can add up to a significant amount.
In order to avoid this happening, some people opt to pay off the interest on their loan whilst they are still alive. This works to reduce the overall loan amount, which reduces the amount of compound interest you are charged.
You can either do this on a monthly or yearly basis, depending on your personal financial situation.
Your equity release loan will be repaid once you pass away and your house is sold by your loved ones and next of kin. The proceeds from the sale of your house will pay off the loan, and if there’s anything left then this money will go to your loved ones and next of kin as inheritance.
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If you are considering equity release Exeter, then it is important to understand the differences between a lifetime mortgage and a home reversion plan.
There are some key differences between the two different types of equity release, which are explained for you further below.
For example, you have to be aged at 55 years old or older to be approved for a lifetime mortgage. When it comes to home reversion plans, you have to be aged 65 or older due to the nature of the loan.
With lifetime mortgages, you remain the sole owner of your property and will never be asked to leave your home at any point.
Whilst you will never be asked to leave your home when it comes to home reversion plans, you do have to sell a percentage of your property in exchange for access to the equity inside your home.
With home reversion plans, you will sell a percentage of your property to the lender. This could be 90% or 10% and whatever you sell to the lender, you will be selling at less than market value.
Whilst you might not get as much as you want for his sale, you will be gaining access to your equity whilst being able to remain living in your home for as long as you want [3].
With lifetime mortgages, you are charged a fixed interest rate. This will compound each month, which will increase the overall loan amount, meaning that your loved ones might receive less inheritance than they might hope to.
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The majority of people who have never considered equity release before might believe that there are limitations on what you can and cannot spend your money on. In fact, equity release in Exeter can be used for many different things.
Whilst there are some rules when it comes to investing your money or spending it on your loved ones, there are fewer restrictions than you might initially think.
It is important for your equity release adviser to understand what your plans are, so that they can put you on the best plan.
Most people choose to spend their equity release money on themselves. This could include things such as home improvements around the house, a nice holiday or a new family car.
Others choose to spend their money on other people and loved ones, including paying for house deposits for their grandchildren or paying for a child’s wedding.
Most people who opt for lifetime mortgages and equity release in Exeter tend to opt for drawdown plans, which helps with the cost of living. This could go towards paying for healthcare needs, a health club, gym membership or nice meals out.
It is incredibly important to be honest and transparent with your equity release adviser about what you plan on spending your equity release money on.
This is because your future plans will inform their thinking and what plan they ultimately recommend you for.
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Equity release in Exeter is such a popular option because there are so many benefits associated with taking out an equity release loan. These benefits are listed and explained further below.
The majority of people who are considering equity release are struggling with the day to day cost of living, which is why they are looking for access to their equity. They might be struggling to pay for their weekly food shop, paying for prescriptions or their endless list of subscriptions.
One of the biggest draws to equity release in Exeter is that unlike with other loans, you do not have to repay the loan until after you pass away or move into a care home. However, you do have the option to repay the interest on your loan in an attempt to reduce the overall loan amount.
The Equity Release Council tries to create and maintain standards throughout the industry. This means that all lenders and advisers must adhere to their rules and guidelines, ensuring that standards are met at all times. All lenders and advisers should be noted on the Financial Services Register.
Essentially, you can be assured that your adviser and lender are both working in your best interest and any issues or complaints that you might have will be taken seriously and dealt with efficiently. Any complaints you might have will be dealt with by the Financial Ombudsman Service.
Finally, one of the best parts of any equity release plan is that you will never be asked to move home. You get to remain living in your home for as long as you want and your lender will never ask you to leave.
In addition to this, you get to enjoy spending your money however you want to and finally get the chance to enjoy your retirement the way you want to.
There are also a number of disadvantages to equity release in Exeter. For example, you might no longer gain access to state benefits, and your next of kin might receive less inheritance than they might have hoped to.
It’s also worth mentioning that equity release is not the cheapest form of borrowing. If you are seeking more cash to navigate the high costs of living, then it might be a better idea to first seek out advice on budget management.
Below, we list organisations offering help and advice on this matter in Exeter:
Address: Dixs Fld, Exeter EX1 1QA
Telephone: 0808 278 7845
Website: http://www.citizensadviceexeter.org.uk/
Address: Business Park, 1 Manaton Cl, Matford Park Rd, Marsh Barton, Matford, Exeter EX2 8PF
Telephone: 01392 455614
Website: https://www.ageuk.org.uk/exeter/
Address: Customer Services, Exeter City Council, Civic Centre, Paris Street, Exeter, United Kingdom, EX1 1JN
Telephone: 01392 277888
Website: https://exeter.gov.uk/benefits-and-welfare/help-managing-your-money/cost-of-living-support/
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Yes, you are able to release equity from your home as a leaseholder. In order to do so, you must have a number of years left on your leasehold.
If you are coming towards the end of your agreement then you will be given the chance to extend your lease on the property so that you can apply for an equity release loan [4].
If you don’t think that equity release in Exeter is for you, then there are a few other alternative options available.
Whilst not all of the options below will be suitable to you, it is worth speaking to a financial adviser about what might work for you and what you should avoid.
If equity release in Exeter is not for you then you might want to consider downsizing your home as a way of freeing up some cash. By selling your home and moving to a smaller home, you could be banking tens of thousands of pounds.
You should be looking to downsize your home if you have more space than you need. However, moving home in later life is not for everyone and can be incredibly hard if you have built up so many memories in your home over the years.
Lots of people opt for selling assets in later life. These could be physical or financial assets. For example, if you own any stocks or shares then now might be the time to cash in. Alternatively, you should clear out the house and sell any valuable pieces that are collecting dust.
Whilst most retirees don’t want to work part-time, for some people it’s simply the best option. If you do choose to get a part-time job during your retirement, then make sure you are doing something you enjoy. You should avoid any overly stressful jobs, as this could have health repercussions for you later down the line.
If you are in receipt of state benefits (means-test benefits), such as council-tax relief or pension credits, then taking out equity release may mean you are no longer entitled to these benefits, and you would need to inform the Department for Work and Pensions of your change in circumstances.
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The Equity Release Council ensures that everyone who opts for equity release in Exeter and the rest of the UK hires a solicitor to work on their behalf.
By doing so, your solicitor will be able to work on all of your paperwork with the lender, and will work with your adviser to get your application across the line.
You need to choose a solicitor who has processed equity release applications in the past and who is confident that they have the time and resources to complete your loan.
Your solicitor will be regulated by the Solicitors Regulation Authority, which will ensure that your solicitor is working to the high standards that they set. You are entitled to instruct your own solicitor to conduct equity release matters on your behalf, and you can find solicitors using the Law Society of England and Wales website.
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Lifetime mortgages are repaid once you pass away or move into a care home. This means that there is no set payment date and your loan will continue to grow in interest until you die.
The loan is only repaid once your house is sold, and the process from the sale of your house should pay off the entire loan.
If, for whatever reason, your house has decreased in value since you first bought it, then the proceeds from the sale of the home might not pay off the loan.
If this happens, then your lender will pay off the remaining amount. This is called the no negative equity guarantee.
Alternatively, you can repay the interest on your lifetime mortgage before you die, which will reduce the overall loan amount. You can make optional repayments, monthly interest payments or pay back the full loan all at once, although you might be charged for this.
Please call our 24-Hour Helpline: 0330 058 1579
If you want more information on equity release in Exeter, then talk to our team at Equity Release Warehouse for free, professional and confidential advice.
We are able to arrange for an advisor to assist you in Exeter and across the region in Exmouth, Sidmouth, Bournemouth, Okehampton, Newton Abbot, Tiverton, Dunsford and Paignton.
All advisors are regulated by the Financial Conduct Authority and appear on the FCA Register. If you are unhappy about the advice you receive, you are entitled to raise a complaint with the Financial Ombudsman.
Why not use our free equity release calculator to work out how much equity you might be able to release? Call our team today on 0330 058 1579.
You can also learn about equity release in Devon and Plymouth here.
[2] https://www.rightmove.co.uk/house-prices/exeter.html
[3]
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