Equity Release York - Lifetime Mortgage Near Me

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

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Equity release in York is another type of loan. Equity release allows those aged 55 or over the opportunity to gain access to the funds in their home, whilst being able to remain living in their home for as long as they want.

If you are aged 55 or over then you can release the equity from your home completely tax free. With equity release in York there are no mandatory monthly repayments.

You do not have to repay a penny of your equity release loan until after you pass away or move into a care home [1].

Once this happens, your loved ones or next of kin(s) will have approximately 6 – 12 months to sell the property.

Instead of the proceeds going to them as inheritance, it will go pay off the equity release loan, plus any interest that’s compounded each year. Yes, that’s right, you are charged interest on an equity release loan.

Interest on equity release in York is always fixed. This means that you’ll be charged the same interest rate each year of your loan, unlike with traditional mortgages which could have a fixed or variable rate.

You are free to spend your equity release funds on whatever you want to.

Equity release loans are able to pay for home renovations, holidays, a better lifestyle or helping loved ones with University fees or house deposits [1].

All equity release loans benefit from the no negative equity guarantee, which ensures that if your home decreases in value and no longer covers the loan amount, then your next of kin will never be liable. Instead, your equity release lender will be.

There are two main types of equity release loans, which are explained and discussed further below for you.

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What’s the Most Common Type of Equity Release in York?

The most common type of equity release in York is a lifetime mortgage. Lifetime mortgages are so popular and common because they allow you to release a set amount of money from your home, whilst you remain the sole owner of the property.

You will not only remain the sole owner, but your lender will never be able to ask or force you to move out.

With lifetime mortgages, you don’t repay a penny of your loan until after you pass away. Once this happens, the house will be sold on your behalf and the proceeds used to pay off the loan in full.

Remember, this will include the initial loan amount plus any interest that has built up over the years and turned into compound interest.

In order to qualify for a lifetime mortgage, you have to be aged 55 or over, own your own property in the UK worth at least £70,000 and not suffer from any debts.

You need to have paid off the majority of your pre-existing mortgage, too.

The second most popular type of equity release in York is a home reversion plan. This type of equity release in York involves selling a percentage of your home in exchange for access to the equity that’s inside your home.

Again, there are no mandatory mortgage or loan repayments with this type of equity release loan either. You can sell up to 90% of the value of your home, or as little as 10%. The more you sell, the more equity you will receive.

Naturally, when you come to sell your home you won’t receive as much of the equity or proceeds, meaning that there more than likely won’t be anything left over to go to your loved ones as inheritance.

If you wish to keep your interest to a minimum, you could opt to repay some of your loan early. This could be on a yearly or monthly basis and is completely optional.

By doing so, you will reduce your loan amount and keep the amount of interest and compound interest you are charged down to a minimum.

However, you must be aware that most equity release loans include early repayment charges. These charges mean that you are limited to how much you can repay on an annual basis.

For most lenders, this is limited to 10% each year.

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How Long is the Interest Rate Fixed For?

When it comes to equity release in York and throughout the rest of the UK, it’s important to understand that unlike other traditional loans, your interest will always be fixed.

The Equity Release Council ensures that all equity release loans offered in the UK include fixed interest rates [2].

This means that your interest rate will remain the same for the duration of your loan, no matter what happens to the Bank of England’s base rate.

This then means that you will be able to work out exactly how much you will owe each year for as long as your loan continues, and for as long as you live.

As equity release loans continue until you pass away or move into a care home, this could add up to a significant amount [2].

Different lenders will offer you different interest rates. This is why it is important to shop around as much as possible and why you should use a qualified equity release adviser to help to find you the very best deals on the market.

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Why Do People Opt for Equity Release in York?

There are numerous reasons why people opt for equity release in York.

Whatever your reasons are for wanting to release equity from your home, it is important that you are open and honest with your equity release adviser about what you plan on spending your funds on, as this might influence what type of equity release loan you should opt for [3].

1. Home renovations and home improvements

One of the most popular reasons why pensioners opt for equity release in York is to pay for home renovations and home improvements.

You might get to a point where moving simply is not an option anymore, but your home is starting to feel slightly dated or too small [3].

This is where equity release steps in. By releasing equity from your home, you get the chance to remain living in your home whilst making some home improvements.

This could include anything from a multistorey extension to a new kitchen, a wet room downstairs, handrails or a stair lift.

By doing so, you will be able to grow old comfortably in your home, and you might even have some cash left over to enjoy afterwards, too [3].

2. Pay off the last of your pre-existing mortgage

In order to qualify for equity release in York, you need to have paid off the majority of your pre-existing mortgage.

However, if you have a small amount of your mortgage left yet to pay off, then you are able to release equity from your home and use this to pay off the last of your mortgage [3].

This means that you will be able to go into your retirement completely mortgage and debt free, which will help to keep down some of your outgoings once you retire and rely on your pension.

3. Helping loved ones

Lots of people end up leaving a hefty amount of inheritance to their loved ones. Whilst this is great and very generous, by doing so you do not get to watch your loved ones enjoy their inheritance [3].

Equity release in York allows you the opportunity to gift your money to your loved ones whilst you’re still alive and able to watch them enjoy it and benefit from it.

This could mean giving your grandchildren enough money to pay for their University or paying for a house deposit.

Likewise, you might choose to pay for a family holiday which everyone will remember and be able to look back on.

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How do I Apply for Equity Release in York?

Applying for equity release in York is incredibly easy. You should start by researching equity release in York as much as possible, before contacting a qualified equity release adviser for advice and support.

By doing so, they will be able to educate you on all things equity release and search the market for the very best deals and interest rates.

Your equity release adviser will never put any pressure on you to make a decision, they are simply only there to provide you with all of the necessary information you need to make a decision.

If you choose to go ahead, then you will need to instruct a solicitor to act on your behalf. Your equity release solicitor will work as a middleman between you and your lender and will draw up an illustration for you.

Most equity release loans take around 6 – 8 weeks to process, similar to that of a traditional mortgage.

Once you have completed, your solicitor will be able to send across your equity release funds.

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Speak to Equity Release Warehouse

If you are in need of some extra cash and are considering equity release in York then you should speak to a member of the Equity Release Warehouse team.

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

Remember, our advisers will never pressure you to make a decision either way.

To start your equity release journey, then give our team a call today by contacting us on 0330 058 1579 or by visiting us online.