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Lifetime Mortgage & General Equity Release Advice in Kingston upon Hull
Reviewed by Tom Philips
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Equity release Kingston upon Hull is a tried and trusted way over 50’s are able to gain access to the cash that is tied up in their home, without having to sell up and downsize to another property.
You get to spend the money you receive from equity release Kingston upon Hull on whatever you want, and don’t have to pay any tax on the money that you receive.
Lifetime mortgages are the most popular type of equity release in Kingston upon Hull, which means that you will have to pay interest on your loan, which will snowball into compound interest.
You can opt to receive your money in one large lump sum, or through a drawdown plan [1].
You are only expected to repay the loan once you pass away or move into a retirement home. When this happens, your house will be sold.
The money from the sale of your home will be used to repay the loan, hopefully in full.
Most houses do not depreciate in value, so the sale of your home should be enough to pay off the loan in full. However, even if it does not, your loan will benefit from a no negative equity guarantee [1].
This no negative equity guarantee ensures that even if your home decreases in value, your nor your loved ones will find themselves responsible for paying off the loan. Instead, your lender will step in and pay off the rest of the loan for you in full.
As an alternative to a lifetime mortgage, you can opt for a home reversion plan.
This type of equity release plan works differently to lifetime mortgages in that you will not be charged interest on your loan, although you will have to sell a percentage of your property before being sent your funds.
This could be as much as 90% of your property, or as little as 10%.
Either way, with either type equity release in Kingston upon Hull, you will never be asked to sell your property or move home.
As long as you stick to the terms and conditions of your loan, you are safe to stay in your property for as long as you want [1].
You can spend the equity release loan in Kingston upon Hull on whatever you want, although most people tend to spend their equity release funds on home improvements, their family or buying another property.
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As explained previously, your equity release loan in Kingston upon Hull gets repaid by selling your property, once you pass away or move into a care home.
Your family or next of kin will be responsible for repaying your loan.
Remember, you will be charged interest on your loan when it comes to equity release Kingston upon Hull. This means that for each year your loan continues, you will be charged more interest.
The final loan amount will be significantly larger than your initial loan amount, as compound interest snowballs year on year [1].
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Lifetime mortgages are a really popular way of releasing equity from your home. With lifetime mortgages, you will only ever have to repay the loan once you pass away, or move into a care home for medical needs.
When this happens, your next of kin or lasting power of attorney will be responsible for paying off your loan. This will usually be expected to happen within 6 – 12 months of the individual moving out of the house.
They will have help along the way from the lender, and your next of kin will work with the lender to repay the loan in full [1].
With either lifetime mortgages or home reversion plans, anyone who lives in the property, such as a tenant, lodger or grandchild will need to vacate the property.
Home reversion plans are different to lifetime mortgages in that you aren’t charged interest on home reversion plans. Instead, you have to sell a percentage of your property.
This can be as much as 80 – 90% of your property or as little as 10%.
Depending on what type of home reversion equity release plan you choose, there is a chance that you might need to pay rent on your property. This will also depend on how much your lender now owns [1].
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If you want to repay your loan early, then you are permitted to do so. However, it is important that you remember that you will be charged an early repayment charge for doing so.
Equity release in Kingston upon Hull includes early repayment charges. Equity release plans are supposed to last for the rest of your life until you pass away the house is sold and the loan is repaid. So, if you want to repay your loan early, then lenders will be keen to charge you for this [2].
Some equity release plans in Kingston upon Hull and lenders are more flexible than others when it comes to early repayment charges.
Some lenders and equity release plans in Kingston upon Hull include early repayment charge exemptions, which will allow individuals to repay their loan early, but only for a handful of reasons.
Some of these charge exemptions are listed and explained for you below [2].
Most equity release plans in Kingston upon Hull include downsize protection, which allows you to repay your loan early if you need to downsize properties. You will not be charged for doing so.
There are a number of significant life events which most lenders will accept as an adequate early repayment charge exemption. This includes things such as the sudden death of one of the owners of the property.
Some equity release lenders in Kingston upon Hull allow you to repay parts of your loan early without being charged.
Usually, you are able to repay up to 10% of your loan each year, which people often do in order to reduce the amount of compound interest you are charged over the years.
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There are a number of factors that influence and affect how much equity you are able to release from your home, including your health, your age and the condition of your property. These factors are listed and explained for you further below.
Equity release in Kingston upon Hull lasts for as long as the borrower lives. So, it is only natural for your lender to use your health and age as determining factors when it comes to how much equity you are able to release.
In order to qualify for equity release in Kingston upon Hull, in the first place, you need to be aged at least 55 years old.
The younger a borrower is, the longer it will likely take the lender to get their money, including any interest back. Naturally, it’s in their best interests to get the money back as quickly as possible. Although, the longer you live, the more you will owe your lender.
If you are 55 years old or older, then you’re likely to be able to release around 30% – 60% of the value of your home. If you are aged 70 or over, then you’re likely to be allowed to release up to 80% of the value of your home.
Naturally, if you are in good health, then your lender will presume that you are likely to live longer. When questioned by your solicitor, equity release specialist adviser and lender it is important you are honest about your health.
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Naturally, the more your property is worth the more you are able to release. In order to gain a clear picture of how much your property is worth, your lender will send someone to your property to undertake a home valuation.
Whether you suffer from any outstanding debts will have a huge impact on how much equity you are able to release from your home. If you still have a mortgage, then you will be advised to pay this off once you receive your money.
If you suffer from any other outstanding debts, then you will need to make your lender aware of this, although they will also perform a credit check on you before making a formal offer.
If you have ever been served a CCJ, then you are also less likely to be approved for an equity release loan.
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The equity release conveyancing process in Kingston upon Hull is quite simple and quite similar to that of a traditional loan or mortgage process.
When it comes to equity release in Kingston upon Hull, it usually takes around 8 – 12 weeks to process an equity release loan.
This is because there are a number of steps to take, all of which are necessary in order to kickstart and proceed with your equity release loan and application in Kingston upon Hull.
The best and first thing that you should do in order to kickstart equity release in Kingston upon Hull is to seek advice from a qualified equity release adviser.
They will ask you a number of questions and will most likely use an equity release calculator to work out how much equity you are likely to be able to release from your home.
Next, you will need to apply for an equity release loan via an application form. Your equity release adviser should be able to help you through this step. Along with this form, you will also have to send your ID and some form of proof of address.
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The third step is officially sending off your equity release application to your chosen lender. Each lender has different ways of application, but most will involve a form which you will need to submit online and/or send in the post or in-person to your solicitor.
The fourth step is a home valuation. This will involve sending someone to your home, who will inspect your home both externally and potentially internally as well.
This is so that they can check that there are no major structural issues with the property, and so that they can assess how much they think that the property is worth.
At this point, you will need to seek independent legal advice. This should be from a solicitor who has dealt with equity release loans before. From this point onwards, they will work on your behalf and will deal with the lender.
Once your lender is completed, your lender will then be able to send you an official mortgage offer. Your lender will get this signed by an underwriter on behalf of your lender. Your lender and your equity release adviser will then work on your loan, which could take 8 – 12 weeks.
Lastly, your lender will complete your equity release loan, and your equity release solicitor will send funds through your solicitor and into your account. This could take a number of days or even a couple of weeks to complete.
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Most plans for equity release in Kingston upon Hull will cost you approximately £1,500 – £3,000, depending on how complex or complicated your loan and application is and how qualified and expensive your equity release advisor and solicitor is [3].
These set-up costs usually include the cost of an equity release solicitor, as well as the cost of an equity release adviser.
Most equity release solicitors and advisers in Kingston upon Hull will expect their payment upon completion, and only few expect payment upfront.
You will also have to pay for someone to complete a home valuation on your property, so that your approximately £100 lender knows how much your property costs [3].
It is important not to forget the fact that you will also be charged interest on your loan, and will continue to be charged interest on your loan every year that the loan and mortgage continue.
This will turn into compound interest, which will increase the overall loan amount, meaning that your equity release loan will cost you more than your initial loan amount.
If you are concerned about how much equity release in Kingston upon Hull will cost you or want more information on the overall, total cost of an equity release loan, then contact your equity release adviser.
Alternatively, you can talk to a member of the team at Equity Release Warehouse for more information and support for all things equity release in Kingston upon Hull.
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When it comes to equity release interest rates in Kingston upon Hull, there is no one fixed interest rate, as interest rates are changing all the time.
However, it is important to understand that once you take out equity release in Kingston upon Hull, your interest rates will be fixed and will not change for the duration of your equity release loan in Kingston upon Hull.
Equity release lenders will base their interest rates on the Bank of England’s base rates, which will change and move as and when.
There are a number of determining factors which will influence and impact interest rates, which are explained further below in this article.
Fixed interest rates mean that you are able to see exactly how much you are going to owe by the end of your loan. A few equity release lenders in Kingston upon Hull do offer variable interest rates, although this is now very rare.
With variable interest rates, your Interest rate will be capped, meaning that there will also be a limit.
There are a number of factors that will influence your interest rate when it comes to equity release in Kingston upon Hull, including the value of your home, where it is located and how it was built.
The general economy will also influence your interest rate, as well as your credit score, which lender you choose to opt for and whether you are married or living with someone else.
If you are considering taking out an equity release loan in Kingston upon Hull but are confused about interest rates or want more information on interest rates and equity release in Kingston upon Hull, then talk to a member of Equity Release Warehouse.
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There are a number of risks and disadvantages associated with taking out an equity release loan in Kingston upon Hull, which is important to acknowledge and accept if you are thinking about applying for equity release in Kingston upon Hull.
It is important to understand that by taking out equity release in Kingston upon Hull, you are increasing your overall debt. This is because you are charged interest on your loan which will increase your overall loan and debt amount [4].
Whilst this does not need to be repaid until you pass away or move into a care home, the sale of your home will have to cover the loan amount, meaning that instead of going to your loved ones as an inheritance, the proceeds from the sale will have to pay off the loan, hopefully in full.
You can choose to make voluntary early repayments, although this is usually capped to 10% a year, otherwise, you will be charged early repayment fees by your lender.
The terms of conditions of your early repayment fees will usually be written into your contract. This is usually a great way of reducing your debt over the years.
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Likewise, equity release in Kingston upon Hull will also impact your eligibility for any benefits that you might already be receiving or are due to receive in the future.
For example, this could affect your eligibility for any means-tested benefits, including things such as pension credit, or council tax benefit [4].
Likewise, by releasing equity from your home you will be subject to early repayment and early exit fees. This is because equity release in Kingston upon Hull is meant to last for a number of years or even decades, and until you pass away or move into a care home.
If you want to repay your loan back early or exit your mortgage agreement early by repaying the loan back in full, then you will have to pay substantial early repayment fees, which could add up to be in the tens of thousands.
This is why if you are considering taking out equity release in Kingston upon Hull, then you will need to think long and hard about doing so, as releasing equity from your home is a lifelong commitment with very serious consequences if you want to leave your mortgage agreement early [4].
Finally, by releasing equity from your home, you won’t be able to leave as much inheritance to your loved ones and next of kin(s) as you would have hoped.
This is because your loan has to be repaid from the sale of your property. Instead of going to your next of kin(s) as inheritance, the proceeds from the sale of your home will go towards paying off the loan [4].
If there is anything left over, then this will go to your loved ones and inheritance. However, as most loan amounts are affected and increased by compound interest, this is often unlikely to happen.
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Lots of people who release equity from their homes worry about the impact doing so might have on an inheritance tax. For many of us, our home is our biggest asset, and our home tends to be the bulk of inheritance that we leave our loved ones.
One of the best things about releasing equity from your home is that there are not many restrictions in place which dictate how you spend the money you receive.
Some people choose to spend their money from equity release in Kingston upon Hull on making some home improvements, whilst others choose to give their money to family and friends.
If you plan on giving your equity release money to your family or friends, then you will need to consider the implication this will have on inheritance tax.
Whilst you are allowed to gift your equity release money to your loved ones as inheritance, there are cheaper ways of doing so and equity release in Kingston upon Hull might not be the savviest way of leaving inheritance.
If you plan to leave your property as inheritance, it is important to remember that your house will have to be sold upon your death, in order to sell off the loan.
Naturally, if your loved ones are able to repay the loan with their own money and wish to keep the property then they are more than welcome to do so.
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Lots of people put a lasting power of attorney in place when they are struggling with their capacity and are no longer able to make decisions for themselves, whether that is to do with their health, their property or their money [5].
Whilst it is not compulsory that you have a lasting power of attorney in place with equity release in Kingston upon Hull, it is recommended.
This is so that should you lose capacity, you have someone in place who you trust to make decisions for you, on your behalf.
Naturally, this needs to be someone you are able to trust in your life, so make sure that you choose wisely [5].
The Equity Release Council will always recommend that you have a lasting power of attorney in place before you take out an equity release loan.
By doing so, your solicitor will be able to work with your lasting power of attorney once you are no longer able to due to health reasons.
Remember, equity release in Kingston upon Hull lasts for as long as you live.
So, you can’t guarantee that you will be in good health for the duration of your equity release loan in Kingston upon Hull This is particularly important if you have opted for a home reversion or drawdown plan.
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If you have recently taken out a mortgage or are considering taking out an equity release loan in Kingston upon Hull, then you will have heard of the term loan to value ratio before.
This term usually refers to the amount of money you can borrow, compared to how much you are able to put down as a deposit [6].
When it comes to equity release in Kingston upon Hull, the loan-to-value ratio refers to the amount of money that you are allowed to release from your home.
This is based on a number of factors, including the value of your property, how much your property is worth and how old you are.
When it comes to lifetime mortgages, you are usually able to release anything between 20% and 60% of the value of your property.
With home reversion plans, you are able to release up to 80% or even 100% of the value of your home. Remember, your loan-to-value ratio usually represents how safe your lender thinks lending you the money is [6].
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Negative equity is a term used to explain when a property is valued at less than the remaining value of the mortgage.
For example, if you still owe £100,000 on your mortgage, and your property decreases in value so much that it is now less than £100,000 then you will be in negative equity.
People usually fall into negative equity when there is a major housing crisis and house properties drop. This is a common problem during recessions when the housing market usually crashes [7].
Being in negative equity is worrying, but it isn’t unheard of. If you are concerned about falling into negative equity, then the best thing that you can do is speak to a mortgage adviser.
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When releasing equity from your home in Kingston upon Hull, it is important that you engage a solicitor to work on your behalf. This is so that they can work as the middleman between you and your equity release lender and handle all of the paperwork.
Your solicitor will work for you for approximately 8 – 12 weeks, depending on how complex your equity release loan is.
You should choose a solicitor who is qualified in dealing with equity release loans and compilations, and who works in a large enough firm so that they will be able to handle the workload.
Your equity release solicitor in Kingston upon Hull should also be accredited by the Solicitors Regulation Authority.
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When it comes to choosing an equity release provider, there are a number of different companies, all offering a number of different plans and offerings. Each lender will have different qualification criteria, and will also provide different benefits.
When first enquiring about equity release in Kingston upon Hull, your adviser should recommend the very best lenders and providers for you and your personal circumstances.
They will take into account your age, your health, the value of your property and your timeline in order to determine which lender might be best for you.
Some lenders will charge you for any early repayments you wish to make, so if you think that you will want to make early repayments, your advisor will also take this into account when determining which lender you should opt to go with:
When choosing an equity release provider, you should aim to opt for anyone who is a member of the Equity Release Council.
This means that they are working to the standards that the Council set, so you know that you can trust and rely on them.
You should also choose a lender that includes a no negative equity guarantee.
This guarantee ensures that even if your house decreases in value, you and your loved ones will not be able to pay off the loan if the proceeds from the sale of your house no longer cover it.
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There are a number of equity release regulators in in Kingston upon Hull to operate throughout the industry to ensure that the industry remains trustworthy.
Whilst all equity release firms in Kingston upon Hull should be monitored by the Financial Conduct Authority as well as regulated by the Equity Release Council, there are a number of other regulators in place who will also be able to support and safeguard you when it comes to taking out equity release in Kingston upon Hull.
The Financial Ombudsman Service is a regulated, financial firm who are able to help resolve complaints. It is entirely free and is able to order firms to pay you any compensation that you are due.
You simply need to submit a complaint to them, and they will get back in touch with you in due course [8].
All solicitors should be a member of the Solicitors Regulation Authority. They are able to regulate the industry and are able to help with any complaints that you might have about a solicitor or solicitors firm.
They can help you get compensation for any errors made, and also provide the public with scam alerts so that they do not fall victim to any scams when it comes to working with a solicitor [9].
The Scottish Legal Complaints Commission is the first point of contact for any and all complaints made about a solicitor in Scotland.
You are able to file a formal complaint with the Legal Complaints Commission if you are unhappy or unsatisfied with the work a solicitor has done for you on your behalf.
The Scottish Legal Complaints Commission is entirely independent and free, so you do not have to worry about any further costs.
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The Financial Vulnerability Taskforce (FVT) was formed in 2021 and has been on a mission ever since to help promote a better understanding and awareness of the personal financial sector and how it works.
They are also working to promote better practice and behaviour in the industry, whilst trying to ensure best practice is actioned at every point necessary.
More and more companies and firms are now joining the Financial Vulnerability Taskforce. As they grow, they will continue to support industry professionals and clients within the sector to improve their practices [10].
The Law Society of Scotland is another independent body which supports solicitors. They work closely with solicitors to protect and support them should a complaint be made. They work throughout England and Wales and work as an industry body.
HM Land Registry registers land and property across the UK. They work to safeguard ownership of land and property and allow over £1 trillion worth of personal and commercial lending to work on secured property and land across the UK.
They have approximately 88% of all land across the UK registered with HM Land Registry. If you buy or sell a property, then you must register this with HM Land Registry [11].
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If equity release in Kingston upon Hull isn’t for you, then there are a number of alternatives that you might want to consider instead.
Some of these options involve not having to sell your home, which is a great option for anyone who might be too old to move home.
Below is a list of some of the most common alternatives to equity release in Kingston upon Hull:
Whilst not all of these options might work, they are well worth considering if you don’t want to take out an equity release plan due to the consequences this will have on your inheritance.
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If you are considering taking out equity release in Kingston upon Hull, then you might be in need of access to some extra cash. Most likely, this is to help with the day-to-day cost of living.
This is where budget planning comes in. If you are struggling for cash, then budget planning is a great way of ensuring that you are able to manage your finances so that they work for you and your current circumstances.
Whilst not every retiree might think about budget planning, or even know how to budget plan on a pension, there are a number of tips and tricks that retirees can put in place to make their life easier and finances stretch further:
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[1] https://www.equityreleasewarehouse.com/help-centre/equity-release-frequently-asked-questions-faqs/
[4] https://www.thetimes.co.uk/money-mentor/article/equity-release/
[5] https://www.equityreleasewarehouse.com/guides/guide-lasting-power-attorney/
[6] https://www.equityreleasewarehouse.com/help-centre/equity-release-loan-to-value-ratio/
[7] https://www.hsbc.co.uk/mortgages/what-is-negative-equity/
[8] https://www.moneysavingexpert.com/reclaim/fight-back-fos/
[9] https://www.sra.org.uk/consumers/
[10] https://consumerduty.org/about/about-the-fvt
[11] https://www.gov.uk/government/organisations/land-registry/about
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