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Lifetime Mortgage & General Equity Release Advice in Cardiff
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 Cardiff is designed for people who are aged 55 years or more. It is widely known as a retirement scheme, as many people use it as a way to boost their retirement income, but it is possible to take out equity from your home if you are still working.
You can only partake in equity release in Cardiff if you are a homeowner, as your equity loan will be secured against your home.
Usually, this only applies to freehold properties, but it can apply to leasehold properties if there is enough time left on the lease.
Equity release consumers in Cardiff must have a property that is worth £70,000 or more.
Not only does this guarantee an equity loan that is large enough for the homeowner to benefit from, but it also means the equity release lender will be able to recover enough money from the property sale to cover the costs of the loan.
Some of the reputable lenders the financial advisors will research on your behalf include Saga, Halifax, Nationwide, Scottish Widows, Legal & General, Aviva, Liverpool Victoria (LV), Canada Life, more2life, Hodge, Just Retirement, Pure Retirement, One Family and LiveMore Mortgages.
All lenders and advisors are regulated by the Financial Conduct Authority and all are signatories to the Equity Release Council. Advisors typically hold qualification such as the industry-standard Certificate in Financial Services (CertPFS Certs CII). This means you benefit from a no negative equity guarantee.
All lenders are backed by the Financial Services Compensation Scheme.
You can find out how much you can borrow using our equity release calculator.
Please call our 24-Hour Helpline: 0330 058 1579
If you want to pursue equity release in Cardiff, it is better to not have an existing mortgage. This is because the equity release lender will have the first charge on your property when they take over from your traditional mortgage lender.
However, if you do have an existing mortgage, you could either pay it off before taking out equity or use your equity loan to pay it off. If you do this, you will need to include all the details of your existing mortgage in your application.
This includes your mortgage reference, the remaining balance, and the name of the mortgage lender.
In fact, many people choose to release equity as a way of paying off their existing mortgage. This allows them to spend more of their money as they are no longer dealing with monthly mortgage payments (equity release lifetime mortgages do not have to be repaid).
Some people worry that their equity loan wouldn’t cover the remaining balance on their existing mortgage. This does happen, but if you speak to a professional adviser about equity release before proceeding, they will be able to advise you on what to do.
One possible option is to have an enhanced lifetime mortgage, but this is only possible for people with certain medical conditions or people who are much older than the average equity release consumer.
With this arrangement, you may be able to release more money and pay less interest.
You could also consider taking out a traditional loan as a means of bridging finance before you release equity. However, you would have to keep in mind that you would be still be in debt, and the money would have to be repaid by a certain deadline.
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You will never be expected to repay your equity release loan whilst you are alive, so don’t worry if you aren’t in a position to make repayments.
Many people go their whole lives without repaying, and though this can affect their family’s inheritance, it does not affect their financial situation while they are alive.
If you do not repay the equity loan, there are no consequences. However, keep in mind that the interest will build, so you may end up owing back a large amount of interest by the end of the scheme.
Yes, you can make the decision to repay your loan early. It is better to do this before you sign off on equity release, as you should choose a plan that allows you to repay the loan.
For example, the voluntary repayment plan allows equity release consumers to pay back some of the loan whenever they want to.
This means you would not be penalised for repayment if you were on this scheme. However, you would never be pressured to repay as the arrangement is voluntary.
Another repayment plan is the interest-only lifetime mortgage. With this arrangement, you can choose to either repay a portion of the interest each month or the total amount of interest. Some homeowners choose to do this as a way to avoid accrued interest and a large amount of compound interest.
However, if you go into equity release in Cardiff without considering repayment, you may find yourself in a situation where you want to repay but there are financial penalties for doing so.
Some equity release plans include an early repayment fee, which is usually 25% of the amount you borrowed. You will always be informed of this before you agree to taking out equity in Cardiff.
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Yes, equity release in Cardiff is certainly possible for low-income earners. There are usually no credit checks or income checks, and the same cannot be said for traditional loans.
This opens up the scheme to people who have not managed to build up a good credit history, or whose salary is lower than average.
Some people are on a low income but live in a high-value property, and in this instance, they would be entitled to a loan as high as someone with a high income in a high-value property.
This is because the value of the property is what determines the size of the loan, rather than the homeowner’s income.
If you do not have enough money to cover the costs of the equity release application in Cardiff, don’t worry, as it is usually possible to deduct money from your equity loan and pay for the application this way.
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Yes, equity release in Cardiff is also open to high earners. However, most people with a high salary would not need to take out equity as they would already have enough support via their pension and savings.
We recommend avoiding equity release in Cardiff if you already have plenty of funds, as it is better to not get into debt. Though you do not have to repay equity money, it is still considered debt, so we recommend relying on your pension and savings if possible.
Some of our customers are concerned that they will not be eligible for equity release in Cardiff as they are in significant debt. This is not something to worry about, as many people who take out equity are in debt.
Some people even choose to release equity from their home as a way of paying off their existing debts, as they are not required to repay the equity loan, so they can enjoy their retirement without struggling with financial pressure (1).
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 Cardiff:
Address: Ely & Caerau Community Hub, Cowbridge Rd W, Ely CF5 5BQ
Telephone: 029 2087 3800
Website: http://www.cardiff.gov.uk/
Address: 4 Working St, St Davids Centre, Cardiff CF10 1GN
Website: http://www.cardiffcu.com/
Address: Discovery House, Scott Harbour, Bute St, Cardiff CF10 4PJ
Telephone: 029 2047 4500
Website: http://www.firstsource.com/
Address: 41A Lower Cathedral Rd, Cardiff CF11 6LW
Telephone: 029 2034 1577
Website: https://riverside-advice.co.uk/
You can read our guide to the alternatives to equity release here. We’ve also, in the interests of helping you make a more informed decision, written a guide on the potential disadvantages and drawbacks of equity release.
It may also be beneficial to contact national organisations such as StepChange and The Money and Pensions Service.
Please call our 24-Hour Helpline: 0330 058 1579
The state pension age in the UK is 66. This is not far off the minimum age requirement for a home reversion – 65 years– but it is far off the lifetime mortgage requirement of 55 years.
This means that most people who have a home reversion will be of state pension age anyway, but many people who opt for a lifetime mortgage will fall short of the state pension.
What are the implications of this? Put simply, anyone who takes out a lifetime mortgage before state pension age will only have their equity release funds to rely on, as their pension won’t have come in yet.
For most people, this will be enough to keep them going, as they may only need additional money to pay the bills each month.
However, if an equity release customer wants to purchase a new home with their loan, they may need to wait until they also have their pension money otherwise they may not be able to afford a second property.
Please call our 24-Hour Helpline: 0330 058 1579
The vast majority of equity release consumers opt for a joint lifetime mortgage, and this is the simplest route as it means both members of the couple are on the same page and are able to get involved with the equity release process.
However, it is possible to take out equity individually. You could do this if you are living alone in your own home, or if your partner does not want to take part in equity release in Cardiff but is happy for you to go ahead with it.
Something to keep in mind is that the final stages of the equity release scheme may be more complicated if you apply for an individual loan that your partner is excluded from.
This is because when you go into long-term care or pass away, the scheme must come to an end and the equity release provider must sell the house, which would involve ordering your partner to move out.
This could be incredibly stressful for them, particularly as they would be grieving and they may be struggling with their health in their later years.
Please call our 24-Hour Helpline: 0330 058 1579
There is a misconception that people who are claiming means-tested state benefits cannot release equity from their home. This is sometimes true, but it depends on the type of benefits you are claiming and any other sources of income you have.
Most people can continue to receive benefits as their equity release funds are counted as part of their savings. However, if the savings exceed the Government saving limits, benefits may be taken away (2). You may have to contact the Department for Work and Pensions to inform them that you are receiving additional funds by way of equity release.
If you speak to an equity release adviser about your situation, they will be able to advise you on whether you would qualify for an equity loan despite claiming benefits.
Sometimes, people are informed that their benefits would be taken away, but they choose to proceed with equity release in Cardiff as this would give them more money overall.
Please call our 24-Hour Helpline: 0330 058 1579
If you are a customer of equity release in Cardiff, the money that is released from your home will of course reduce the amount of equity in your home. As a result, when you pass away and your home is sold, less money will be available to your family.
What’s more, as you will have borrowed money, the equity release lender will take a large portion of the sale proceeds, leaving your family with even less.
This is why we recommend speaking to your family about your decision – it is something that will directly affect them.
However, do not worry that your family will be left with nothing at all, as you can prevent this from happening by implementing inheritance protection. Ask your equity release adviser about this, as it is a part of most modern equity release plans.
If you would like more information on equity release in Wales, including Cardiff and Swansea, then the first thing that you should do is speak to a specialist advisor at Equity Release Warehouse.
If you are unsure which equity release products are available in Cardiff, head to the plans section of our website. The two main options are lifetime mortgages and home reversions, but there are many types of lifetime mortgage to choose from.
For example, we have the repayment types such as the voluntary repayment plan and the interest only plan; the purpose-driven plans including the buy to let plan and second home plan, an income plan, a drawdown plan, an enhanced plan, and a lump sum plan.
Don’t worry if you don’t know what this means yet as we will clarify everything when you reach out to us. You can also have a look at our frequently asked questions page to ease any specific concerns you have about equity release in Cardiff.
All advisors we work with are regulated by the Financial Conduct Authority. This means you are covered under the Financial Services Compensation Scheme, and you lodge a complaint with the Financial Ombudsman Service (FOS) if you are unhappy about the advice you receive in relation to equity release.
All lawyers are regulated by the Solicitors Regulation Authority and are members of the Law Society of England and Wales. If you are unhappy about the legal advice you receive in relation to equity release, you can lodge a complaint with the Legal Ombudsman.
Get help now across Cardiff in Clwyd, Dyfed, Glamorgan, Gwent, Gwynedd, Llandrindod Wells, Llanidloes, Mid Glamorgan, Milford Haven, Pembrokeshire, West Glamorgan and West Neath.
Please call our 24-Hour Helpline: 0330 058 1579
[1] Equity release: what is it and what are the risks? https://www.thetimes.co.uk/money-mentor/article/equity-release/
[2] Will equity release affect my benefits? https://www.thetimes.co.uk/money-mentor/article/equity-release/
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