Equity Release Wigan - Lifetime Mortgage Near Me

Lifetime Mortgage & General Equity Release Advice in Wigan
Reviewed by Tom Philips

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Equity Release Wigan & Near Wigan

Equity release Wigan is a type of loan, only offered to those aged 55 or over who own their own home worth at least £70,000.

They get the chance to release some of the cash that has built up inside their home, without ever having to sell their property or move out [1].

You also get to spend your equity release money on whatever you want.

This might include things such as home improvements, a nice holiday, a new car, helping family or friends out financially or simply treating you and your family to a nice holiday.

The money that you receive will be tax-free, meaning that you won’t have to pay any tax on the money that you receive.

However, you will have to pay interest on your loan, which will be charged on a monthly or sometimes annual basis.

This interest will turn into compound interest over the years, meaning that you will be charged interest on your interest and that your overall loan amount will grow significantly over the years [1].

Equity release plans are unlike any other type of loan, in that you do not have to repay the loan whilst you are still alive.

With equity release in Wigan, you only have to repay the equity release loan once you move into a care home or pass away.

Once this happens, your next of kin and family will be left responsible for selling the property you have taken equity release out on. The proceeds from the sale of the house will then repay the equity release loan in full [1].

Whilst this might mean that you are unable to leave your loved ones your house as inheritance, it does mean that you gain access to the cash that has built up inside your home now, rather than later and without having to sell.

As you have access to this cash now, you might choose to spend some of the money you receive on your family and next of kin, to make up for the fact that you won’t be able to leave them as much inheritance.

Releasing equity means that you get to treat your family now, rather than leaving them a lump sum of money once you pass away.

You could decide to spend your equity release money on paying off your children’s or grandchildren’s University fees or paying for a house deposit for them. This will help them immensely, as the cost of living continues to rise [1].

How does equity release Wigan get repaid?

Equity release Wigan gets repaid once you pass away or move into a care home.

Once this happens, your next of kin, whether that is your children or grandchildren, will sell the property.

They will have anywhere between 6 and 12 months to sell the house. Once they do, they will have to use the proceeds from the sale of the house to repay the loan.

Usually, the proceeds from the sale of the house is enough to repay the entire loan.

This is because most houses increase in value over the years, so the sale of the house is able to cover the initial loan amount including any interest that may have cropped up.

If your property has decreased in value, for whatever reason, then you will need to check that the property still covers the overall loan amount [2].

If the property has decreased in value so much that it no longer covers the loan amount, then you and your next of will be protected by the no negative equity guarantee.

This guarantee ensures that even if your house decreases in value so much that it no longer covers the loan amount, then your next of kin will not have to repay the loan on your behalf. Your lender will have to repay the difference.

There are two main types of equity release Wigan, including lifetime mortgages and home reversion plans.

Lifetime mortgages are the most popular type of equity release in Wigan, and allow anyone over the age of 55 the chance to release equity from their home without having to repay a penny whilst you are still alive.

You are charged interest on your equity release lifetime mortgage, however. [2].

Home reversion plans work a bit differently to lifetime mortgages, in that you are not charged interest on your equity release loan, but you do have to sell a small percentage of your property in exchange for your equity release funds.

What if I want to repay my equity release loan early?

Equity release in Wigan is designed to last for the rest of your life, and only needs to be repaid once you pass away or move into a care home for health reasons.

Therefore, lenders can be keen to charge you if you decide that you want to repay your equity release loan early.

This is because lenders want to charge you interest on your loan for as long as possible, as the more interest they charge, the more money and profit they make.

This is why they aren’t always happy when people try to repay their equity release loan early.

If you choose that you want to repay your equity release loan early, then you should expect to pay what is called an early repayment charge.

This is usually referred to as an ERC in equity release terms and will usually be a set percentage of your overall loan amount.

Whilst there are many benefits to repaying your equity release loan early, such as the chance to reduce some of the interest that has built up, the early repayment charges are often enough to put people off repaying their loan early.

The more money you release, the higher your early repayment charge will be.

However, as an incentive to choose them as your lender, a handful of lenders are now including a charge-free early repayment allowance, allowing individuals to repay up to 10% of their loan each year, without being charged for doing so.

Not only will this reduce the amount of interest you are charged on your loan, this will also help to reduce the overall loan amount meaning that there might be some money left over as inheritance after your loved ones sell your property and repay the loan.

There are also a number of reasons why a lender would let you repay your equity release loan early without charging you.

This includes unforeseen circumstances or significant life events, where one lender or member of the agreement passes away or moves into a care home and is no longer able to remain living in the home.

Likewise, as per the Equity Release Council’s guidelines, all equity release loans across Wigan and the rest of the UK include what is called downsize protection.

Downsize protection allows anyone the chance to move house after taking out an equity release loan by downsizing property.

They will be able to use the leftover cash from the sale of their property to repay the equity release loan without being charged.

What Determines How Much Equity I am Able to Release?

Most people are able to release anything between 10% and 90% of the value of their home, although this depends on a number of different factors.

Some of these factors are listed and explained further below for you, including your age, your health, the value of your home and whether or not you have any outstanding debts or a traditional, pre-existing mortgage to pay [3].

1. Age and health

Your age and your health are the biggest determining factors when it comes to how much equity you are able to release from your home.

Your loan will continue to last for as long as you live, meaning that the longer your loan continues, the more interest you will be charged.

Whilst most lenders want to charge you as much interest as possible, they won’t be happy if you are unable to repay the loan via the sale of your house if too much interest has compounded.

So, the younger you are, the more chance there is of this happening.

So, equity release lenders do not like to release money to anyone aged 55 or under, as this gives the loan and interest too much time to compound, meaning that it is unlikely that the sale of the house will be enough to repay the loan in full.

Therefore, the older you are the more likely you are to get approved for a loan in the first place and will be allowed to reduce a significant amount of funds from your home [3].

2. The value and condition of your property

Next, the value and the condition of the property will be assessed.

This is usually done very early on in the equity release application process and means that your chosen lender will want to send an approved home valuation agent to your home to assess the property both internally and externally.

The home valuation agent will be looking for any issues inside or outside the house, including any subsidence or structural issues.

They will also assess the general state and condition of the home and garden.

When creating a home valuation report, the agent will also assess the general area and will use the value of your neighbour’s properties to determine how much your property is now worth.

Hopefully, your house will now be valued at a lot more than you bought it for years ago [3].

3. Any outstanding debts

During the assessment, your lender will also want to know if you have ever suffered from any outstanding debts or not.

If you have any credit cards, mortgages or cars on finance, then your lender will want to know about them and you will have to declare them as soon as possible.

If you are still repaying your traditional mortgage, then you will need to repay this yourself or with the money that you will receive through equity release.

If you are suffering from serious debt, then you might be refused for an equity release loan altogether. The same can be said if you have ever received a CCJ in the past.

How long does equity release in Wigan take and what are the conveyancing steps?

The equity release conveyancing process can take anywhere between 8 – 12 weeks to process from start to finish.

Your conveyancing will be carried out by an equity release solicitor, who will work on your behalf and deal with all things related to the lender.

The first thing that you should do is seek advice from an equity release specialist and adviser.

They will talk you through all of the future steps and will be able to explain all things equity release in Wigan.

They won’t put any pressure on you to make a decision, and are only there to provide you with all of the information you need to make a decision yourself [4].

If you decide that you want to go ahead with your equity release application, then you should apply via your specialist and adviser.

You will need to submit your application and instruct an equity release solicitor to work on your behalf to go through all of the conveyancing steps.

Your lender will then send someone to your house to carry out a house valuation, where they will be able to determine how much they think your house is worth.

You will then receive your formal equity release loan offer before your solicitor finalises your loan and its terms and conditions.

A few weeks later, you will complete your loan and your funds will be transferred into your account via your solicitor.

Once this is complete, you are then free to spend your equity release funds on whatever you want, including any home improvements around the house, a family holiday or gifting it to family or friends [4].

How much does equity release in Wigan cost?

Equity release in Wigan costs around £1,000 to £3,000 depending on a number of different things.

This includes the overall value of your loan and property, as well as the type of solicitor you employ.

These set-up costs are usually payable once you receive your equity release funds, rather than beforehand.

Remember, these aren’t the only costs of equity release. Throughout your loan, you will be charged interest on your loan which will turn into compound interest as the years go on.

This means that you will be charged interest on your interest.

If you are concerned about the cost of equity release in Wigan and want more information, then talk to your equity release specialist or adviser.

They will be able to lay out all of the costs of your loan and will be able to explain when these will be payable.

Equity release interest rates

All interest rates with equity release in Wigan are fixed. This means that they work differently to traditional mortgages, where you will be charged interest which will fluctuate every few years.

Your interest rate will be the same throughout your loan, so you will be able to see exactly how much you will owe after 10 years, 15 years or even 20 years.

Your interest will compound every year, so the longer your loan continues, the more you will owe.

Each lender will have different interest rates, so it is best to speak to your equity release adviser to see which lenders are offering the most competitive interest rates.

Risks of taking out equity release in Wigan

At Equity Release Warehouse, we know that there are many, many benefits to taking out equity release in Wigan.

However, we know that in order to make a truly informed decision, you must be well informed of the risks associated with equity release as well as the benefits. Some of these risks are explained further below.

1. Compound interest

Each equity release loan involves compound interest, meaning that your overall loan amount will be increased each year that your loan continues.

Compound interest is essentially interest on interest, which means that the entire proceeds from the sale of the house will be used to pay off the loan, and the chances are that there won’t be much money left over afterwards.

2. It will have an impact on any means-tested benefits that you receive

Taking out equity release in Wigan also impacts your eligibility for any means-tested benefits. This is because releasing equity from your home increases the amount of money in your savings.

This means that any means-tested benefits such as council tax reduction or universal credit might stop or be reduced after taking out an equity release loan.

Even if you do not receive any means-tested benefits at the time of taking out an equity release loan, you should consider how this might impact any benefits you might need to claim in the future.

3. Early repayment charges and exit fees

Likewise, taking out equity release in Wigan means that you are expected to stay tied to the loan for as long as you live.

Paying off parts of the loan or repaying it early altogether will involve early repayment charges or exit fees. This could be a significant percentage of your overall loan amount.

4. You won’t leave as much inheritance

Finally, releasing equity from your home in Wigan means that you won’t be able to receive as much inheritance as you might have once planned to.

This is because the proceeds from the sale of your home will go towards paying off the equity release loan, instead of going to your loved ones and next of kin(s) as inheritance.

Equity release in Wigan and inheritance

If you take out equity release in Wigan, then the chances are that you won’t be able to leave your loved ones as much inheritance as you might have hoped.

This is because instead of leaving your property to your next of kin(s) your next of kin(s) will have to sell your property and pay off the equity release loan.

Of course, if your house sells for more than expected, then there might be some money left over which will go to your loved ones as inheritance, although this isn’t always the case.

One of the benefits to taking out equity release in Wigan is that if the opposite happens, and your house decreases in value to the point where the proceeds from the sale of the house no longer cover the loan amount, then you will be protected by the no negative equity guarantee.

There is a way that you will be able to ensure that you can leave at least some inheritance to your loved ones after taking out an equity release loan.

By making early repayments within the lender’s threshold, you will be able to reduce the amount of compound interest charged to your loan, reducing the overall loan amount.

This means that when your loved ones come to sell your property after you pass away, there might be some money left over to go to them as inheritance.

Equity release in Wigan and lasting power of attorney

Taking out an equity release loan in Wigan is a huge decision to make and isn’t one that should be taken lightly.

Equity release loans are usually taken out later in life, usually over the age of 60. They are also intended to last for as long as you live, meaning that you might not always be in great health or have the mental capacity to decide what you want to do where your equity release loan is concerned.

This is why the Equity Release Council highly recommends that you put a lasting power of attorney in place before applying for an equity release loan.

A lasting power of attorney is someone who acts on your behalf and makes decisions for you when you no longer have the mental capacity to do so.

This could be down to old age or because you are suffering from a disease such as dementia [5].

Your chosen lasting power of attorney will be responsible for making decisions about your health, your finances, and your home when you no longer have the capacity to do so yourself.

As your equity release loan ends once you pass away, it is likely that you will be ill and without capacity during the end of your loan agreement.

This is why the Equity Release Council wants it to be mandatory to have a lasting power of attorney in place before applying for an equity release loan.

If you are considering equity release in Wigan, and want to have a lasting power of attorney in place, then make sure that you pick someone who is reliable and trustworthy.

You should pick someone you know really well and who you would trust with your life, your health, your home and your finances. Usually, this is a close family member or lifelong friend.

How does the loan-to-value ratio work when it comes to equity release?

Everyone who has a mortgage would have heard of the term ‘loan to value ratio,’ otherwise known as LTV ratio in the financial industry.

When it comes to traditional mortgages, the loan-to-value ratio of any mortgage or agreement refers to the amount of money that you are able to borrow compared to the deposit you put down when you first bought the house, which is typically anywhere between 10% and 20% of the value of the home [6].

For example, if you want to buy a house worth £200,000 and you have a 10% deposit of £20,000 then your loan-to-value ratio is 90%.

This means that the bank will have to loan you 90% of the total value of the home in order for you to afford to borrow it. In this case, that would be £180,000.

When it comes to equity release in Wigan, the loan-to-value ratio works a bit differently. When you take out equity release in Wigan, your loan-to-value ratio will refer to the amount of money you are able to borrow from your home.

This is usually anywhere between 20% and 80% of the total value of your home.

Your loan-to-value ratio depends on a number of different factors.

This includes things such as your age, your health, the condition of your property and whether or not you are suffering from any debt.

If you are considering equity release in Wigan but are confused about the loan-to-value ratio, then talk to a member of the Equity Release Warehouse for more information and support.

What is negative equity when it comes to equity release in Wigan?

Negative equity is every homeowner’s worst nightmare.

Negative equity is a term used to describe when your home decreases in value to the point where it becomes less than the mortgage left.

This means that you will lose money if you were to choose to sell your home.

When it comes to equity release in Wigan, you do not have to worry about getting into negative equity.

This is because all equity release plans in Wigan and the rest of the UK are protected by the no negative equity guarantee.

The no negative equity guarantee ensures that even if the proceeds from the sale of the home do not cover the loan amount when it comes to repaying the equity release loan, your loved ones will not be responsible for paying off the rest of the loan. Instead, your lender is responsible for paying off any negative equity [7].

If you are considering equity release in Wigan, then you will want to understand what negative equity is and how the no negative equity guarantee works.

To learn more about negative equity, talk to a member of our team at Equity Release Warehouse.

Legal aspects of equity release in Wigan

If you want to take out equity release in Wigan, then you will need to employ an equity release solicitor.

They will work on all of the different legal aspects of your equity release loan, including the conveyancing process.

They will take between 8 – 12 weeks to process your loan and will work as the middleman between you and your lender to get your loan past the line.

They will draw up your contract and go through the terms and conditions with your equity release lender.

If you hire a good solicitor, then they will push back on the lender to include certain clauses and terms which will benefit you and your future, including downsize protection, no early repayment fees and the chance to move house without having to pay a fine.

If you are confused about the legal proceeds surrounding equity release in Wigan, then speak to a member of the Equity Release Warehouse for more guidance or support.

Choosing an equity release provider

Choosing an equity release provider isn’t an easy task. Nowadays, there are a number of different lenders to choose from, all with their different benefits and risks.

It is important to remember that you will not be approved for every lender, as they each have their different qualification criteria.

Some lenders won’t lend to anyone aged 65 or under, whilst some will lend to those aged 55.

Some lenders also won’t loan to anyone whose property is not made out of traditional materials, whereas others are more relaxed.

Likewise, some lenders will not approve anyone for an equity release loan who has ever received a CCJ, whereas other lenders might be a bit more open to doing so as long as they are now debt-free.

Below is a list of some of the very best equity release lenders across Wigan and the rest of the UK.

Remember, just because you are qualified by one lender, you might not qualify for another:

Halifax
Scottish Widows
Legal & General
Aviva
Liverpool Victoria
Canada Life
More2 Life
Just Retirement
Pure Retirement
Age Partnership
Key Partnership
Sun Life

Your qualified equity release adviser will be able to find out which lenders you are best suited to and will be approved for.

They will only recommend and suggest lenders whom you are likely to get approved for and will put forward a number of different lenders for you to choose from.

They will lay out their pros and cons as well as their terms and conditions.

You will then be able to look over all of this information and make a decision on your own terms.

There is no rush and your equity release adviser will never put any pressure on you to make a decision before you are ready to.

Equity release regulators

Thanks to a number of different equity release regulators, the equity release industry is now more trusted and safe than ever.

There are a number of different lenders who are improving the equity release industry, some of which are listed below:

Financial Ombudsman Service
Law Society of Scotland
HM Land Registry
Solicitors Regulation Authority
Financial Vulnerability Taskforce
Scottish Legal Complaints Commission

The above equity release regulators all work to improve the equity release industry in different ways.

Some of them support clients, whereas some of the other regulators work on the side of the solicitor, lenders and advisors to make sure that they are supported and represented.

The Equity Release Council also works to improve regulation and standards right across the industry, making sure that standard values and standards are kept to and met when it comes to equity release solicitors, advisers, specialists and lenders.

If you have a complaint about an equity release lender, adviser or solicitor then some of the above regulators are able to work on your behalf to make sure that your complaints are listened to and taken seriously.

Some of them might even be able to find you some compensation.

Alternatives to equity release in Wigan

At Equity Release Warehouse, we believe that equity release is the perfect solution for those aged 55 or over who need access to more cash.

However, we also understand that whilst equity release has been able to help millions of people up and down the country, it is simply not for everyone.

Some people simply might not want to release equity from their homes because they want to leave their property as inheritance to their loved ones once they pass away.

Others simply might not qualify for equity release in Wigan, due to their age, the value or condition of their property or their debt. Below is a list of some alternatives to equity release in Wigan.

1. Downsizing

If equity release in Wigan simply is not for you, then you might want to consider downsizing your property.

This means selling up and moving to a cheaper property so that you can bank the cash difference. For some people, this is the perfect answer.

However, some others aren’t able to downsize their property because they simply aren’t in a position to move.

2. Personal loan

If equity release in Wigan and downsizing are not for you, then you could consider taking out a personal loan, although this should only really be the last resort due to high interest rates.

You could opt to borrow money from a family member or friend, with the intention of paying them back.

However, if you do so then you should have this loan agreement in writing, to protect both yourself and the individual you are borrowing money from.

3. Renting out a room

Alternatively, you could choose to rent out a room in your house. If you are aged 55 or over, then the chances are that you have a few spare rooms empty in your house.

This means that you are in an ideal situation to be able to rent out one of your rooms to a family member or lodger.

This will provide you with an additional income and might even provide some company for you and your partner.

If you choose to rent out a room for some additional income, then make sure that you get your renters agreement written down and signed by your new tenant, so that they are aware of the terms and conditions of their tenancy.

4. Getting a retirement job

An increasing number of retirees are now turning to getting retirement jobs due to the increase in the cost of living over the years.

This usually involves getting a part-time job at a local cafe, shop or garden centre.

Remember, if you are going to get a retirement job then you should choose one that will not cause you stress as you age.

5. Budget planning

Finally, if you are struggling for income, then you should always look to manage your budget. This includes checking all of your outgoings and income.

You should make sure that you cancel any unnecessary outgoings, including any subscriptions that you no longer use enough to warrant paying for them.

You should also check to see if you are eligible for any grants or benefits from your local council, including pension credit support, job seekers allowance or council tax reduction.

There are also a number of online budgeting tools available for you to use, including Good Budget, Mint and Every Dollar.

Speak to Equity Release Warehouse

If you are considering equity release in Wigan, then speak to a member of the Equity Release Warehouse team.

Our team of specialists are on hand to provide you with all of the information you need to make an informed decision.

They will use their equity release calculator to work out how much money you are able to release and will be able to help you apply for a loan.

Our team of specialists will never put any pressure on you to make a decision and are simply there to inform you on how equity release works.

If you want more information on equity release in Wigan, then call a member of our team today by calling us on 0330 058 1579 or by visiting us online by searching for www.equityreleasewarehouse.com.