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Lifetime Mortgage & General Equity Release Advice in Cambridge
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.
Equity release Cambridge takes a different amount of time for every homeowner, but we would usually advise you to expect the entire process to last around eight weeks (1).
All advisors we may refer you to are regulated by the Financial Conduct Authority and registered in the Financial Services Register. Further, lenders and advisors are signatories to the Equity Release Council. This means you will benefit from a no negative equity guarantee when you apply for equity release.
There are six stages of equity release in Cambridge, and each stage tends to take around a week to complete, but given that some steps take a little longer than a week and there may be some delays, we tend to say that the process lasts eight weeks.
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The first stage is seeking advice from a professional equity release adviser who will explain equity release to you and discuss its features and risks, as well as recommending an equity release plan.
When you confirm that you want to go ahead with equity release Cambridge, the adviser will help you to make an application to a lender in Cambridge.
Next, you will have a property valuation which comes with a valuation fee. This is when a surveyor visits your home and takes notes regarding its condition and other things that may affect its value.
After around a week, you will find out how much your property is worth, and this figure will also be passed on to the lender.
Please call our 24-Hour Helpline for equity release advice in Cambridge and the surrounding areas of Fulbourn, Milton, Impington, Girton, Grantchester, Trumpington, Great Shelford, Bottisham, Newtown, Arbury, Petersfield and Barnwell. 0330 058 1579
If your property is approved by the equity release lender, they will make you an offer for an equity release loan that is secured against your Cambridge property. It may take around a week for them to come up with this offer and communicate it to you and your solicitor.
Next, you will need to seek professional legal advice with a solicitor of your choosing. They will read through the offer and ensure everything is as it should be, before helping you to confirm the offer (or to reject it if you aren’t happy with the conditions). Again, this should take around 7 days.
The next stage in the process is sometimes the longest. It is when your solicitor makes requisitions, which means they ask for more information from the lender and draw attention to certain aspects of the offer they need clarification on. It can take up to two weeks, but if no requisitions are necessary, this stage won’t happen.
The final week is completion week. It is when your offer is finalised and you are informed of the date that you will receive your equity release loan. A week to celebrate!
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When people ask how much equity release in Cambridge costs, they could be asking a number of things, so we will try to answer every potential meaning this separate article.
This is completely dependent on the size of the loan you take out in Cambridge. The higher the value of your property, the larger the loan, and the larger the loan, the more money you will owe.
However, with equity release in Cambridge, there is never any need to repay the money, so in this sense, it doesn’t cost you anything. The money will be taken from your property sale when you pass away or move into long-term care, so your finances are not affected while you are still alive.
Some equity release advice firms offer free initial advice, and we are proud to count ourselves as one of them. This means you do not have to spend any money when you are first seeking advice on equity release in Cambridge.
However, there are other fees you will need to consider, such as the subsequent equity release advice fees, legal advice fees, other legal fees, and application fees. The cost will vary depending on the firms you choose, but you can certainly shop around before settling on one.
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Below, we briefly outline both of the main equity release options available in the UK:
The first option is to have a home reversion in Cambridge. You sell a share of your home to an equity release lender (for between 30-60% of the market value) and this allows you to access a tax-free lump sum of cash for retirement.
For the duration of the scheme, you will remain in your home and you will be able to spend your loan on anything of your choosing. You could even put your loan towards home improvements to help you appreciate your property even more, and to increase the value of your property.
The second form of equity release in Cambridge is a lifetime mortgage. You take out a mortgage with an equity release provider after deciding on the specific scheme you would like. Your loan will be transferred to you as a lump sum or in regular instalments.
Just like with a home reversion scheme, you will be expected to stay in your home permanently. One difference with a lifetime mortgage is that you may not be able to spend your loan on anything you’d like, as you may have selected a specific scheme such as a buy to let scheme, meaning you would have to purchase a second property to rent out.
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Below, we outline the advantages of taking out equity release:
An obvious advantage of equity release in Cambridge is that you can use it as a way to purchase something that was previously out of reach, meaning you can let go and enjoy yourself in retirement. Perhaps you want to spend your loan on relaxing holidays, home improvements, or a brand-new car.
Another advantage is that any money you gift to your family from your equity release loan is not liable for inheritance tax for seven years, provided that you live for seven years after gifting the money. This is great news for people who want to help out their loved ones without having to pay a huge amount of tax.
Finally, there is so much flexibility when it comes to taking out equity in Cambridge. You can choose between a home reversion or eight different types of lifetime mortgage, which means there is a scheme for everyone who is eligible.
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Below, we outline the potential drawbacks of taking out equity release, which we urge you to fully consider before moving forward with the process:
When you get involved with equity release, you are borrowing money that needs to be repaid eventually. Even if you don’t have to make monthly repayments while you are alive, it will still be money that you owe back, so you must remember this when you commit to equity release.
As the money does have to be paid back eventually, this can impact your family members who will receive less money in their inheritance than they would have done without equity release. This can be troubling for homeowners who are close to their family and want to ensure they can leave them a good amount of money.
Finally, there are certain criteria you must meet to be considered for a Cambridge equity release loan, which could be considered a disadvantage to people who are not eligible. You must be 55 years old or more, you must be a homeowner, and your property must be worth at least £70,000.
If you are releasing equity to combat the cost of living, then it might be better to first try to see if you can better manage your budget. Below, we list organisations that may be able to help in Cambridge:
Address: 66 Devonshire Rd, Cambridge CB1 2BL
Telephone: 0808 278 7808
Website: http://www.cambridgecab.org.uk/
Address: The Cherry Trees Club, St Matthew’s St, Cambridge CB1 2LT
Telephone: 0300 666 9860
Website: https://www.ageuk.org.uk/cambridgeshireandpeterborough/
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No, unfortunately, you cannot be an equity release consumer if you have not yet turned 55 years old. The scheme was made for people either of retirement age or who will be retiring soon, which is why there is a minimum age requirement.
Even if it were possible to take out equity at a young age, it would have potentially negative consequences as the interest would accrue over a very long period of time, and this could result in your family owing back a large amount of money.
The rules regarding how much value your property should have are slightly more flexible than the age rules. It may be possible for you to release equity with a certain provider if your home is worth less than £70,000, as it may be useful to the lender for other reasons such as its condition and the location.
However, most of the time, you will not be entitled to an equity release mortgage or a home reversion if your property is worth less than this amount. This is because you won’t have as much to offer to the lender, so they would be more at risk if they made you an offer compared to making an offer to a homeowner with a highly valuable property.
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There is no way to get around owing interest with an equity release scheme in Cambridge. However, you do have the decision to make when it comes to equity release interest. You can either pay it back as you owe it or leave it alone with the knowledge that it will accrue.
Paying it back via an interest only or voluntary repayment lifetime mortgage can be a good way of reducing stress on your family as you know that only the loan amount will be taken when your home is sold (2).
On the other hand, leaving it to accrue works best if you do not have a steady monthly income and you are taking out a loan as a means of earning enough to pay the bills. Just remember that compound interest will also be charged on the loan as a whole, and this amount can be significant if you haven’t repaid anything.
You could always opt for a voluntary repayment plan and repay as and when you can, as you don’t have to be earning a steady income to do this. The decision is yours, but if you are struggling to make your mind up, ask an adviser for help.
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Yes, you can most definitely release equity in Cambridge on a low income. Most equity release lenders will not perform affordability checks, so your income doesn’t even come into it. Some of the reputable lenders the financial advisors will research on your behalf include Scottish Widows, Legal & General, Aviva, Liverpool Victoria (LV), Canada Life, more2life, Hodge, Just Retirement, Pure Retirement, One Family and LiveMore Mortgages.
The only thing you need to be able to afford is the fees that come with the equity release process. If you don’t have the funds for this, don’t worry as you could borrow from your equity release loan. The amount you spent on fees would be deducted from the loan before you received it.
Your financial situation will be analysed before you are able to release equity, and this includes checking whether you are claiming any means-tested state benefits. You will not be prohibited from Cambridge equity release if you are claiming benefits, but it is possible that your benefits would be removed once you received your loan.
For example, equity release could mean you lose your entitlement to council-tax benefit, jobseekers’ allowance or disability benefits. You will be legally obliged to report your change in circumstances with the Department for Work and Pensions. For this reason, the advisor is obliged to mention all the alternatives to equity release with you during the consultation process.
We encourage you to speak to a financial adviser about this as they will be able to tell you whether your benefits would be impacted.
Please call our 24-Hour Helpline: 0330 058 1579
To speak to an equity release expert on equity release in Cambridge, don’t hesitate to call us on 0330 058 1579. We are available between 8am-8pm every day of the week to answer your questions in detail. You can also benefit from our equity release calculator.
Access help and advice today across Cambridge in Bar Hill, Chesterton, Comberton, Cottenham, Fulbourne, Girton, Hardwick, Harston, Haslingfield, Histon, Madingley, Milton, Oakington, Shelford, Teversham, Toft, Waterbeach, Wilbraham.
All advisors are regulated by the Financial Conduct Authority. Advisors are also members of the Equity Release Council. You are also protected by the Financial Ombudsman Service.
[1] How long does the equity release process take? https://www.telegraph.co.uk/financial-services/retirement-solutions/equity-release-service/how-long-does-equity-release-take/
[2] Is equity release a good idea and is it safe? The pros and cons https://www.telegraph.co.uk/financial-services/retirement-solutions/equity-release-service/how-long-does-equity-release-take/
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