Equity Release Gateshead - Lifetime Mortgage Near Me

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

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Equity Release in Gateshead

Everyone dreams of a comfortable retirement. However, for many retirees up and down the country, a lot of their wealth is tied up in their home.

This means that although they might be asset-rich, they are often cash-poor. This is where equity release in Gateshead comes in.

Equity release in Gateshead is another type of loan, allowing anyone aged over 55 years old the opportunity to release some of the money from their home without having to sell up.

You can then use your money to improve your lifestyle in your retirement, make some home improvements or help friends or family with University fees or house deposits [1].

With equity release in Gateshead, you don’t have to repay the loan until after you pass away but will be charged interest on your loan which will turn into compound interest until you pass away or move into a care home.

Once this happens, the loan will be repaid through the sale of the home [1].

There are two main types of equity release loans, known as lifetime mortgages and home reversion plans. These are explained below.

1. Lifetime mortgages in Gateshead explained

Lifetime mortgages are the main type of equity release plans. You have to be aged at least 55 years old in order to qualify and do not have to sell your home in order to gain access to the equity in your home.

You will be charged interest on your loan, which will compound. You can release money in a lump sum or a drawdown plan.

2. Home reversion plans in Gateshead explained

Home reversion plans work differently to lifetime mortgages, in that they do involve selling some of your home in order to gain access to the equity.

Whilst you will not have to move out, you will have to sell a percentage of your home to the lender.

This could be as little as 10% or as much as 90% of the value of your home. You will also have to sell this percentage of your home for less than market value.

You have to be aged at least 65 years or older in order to qualify for this type of equity release.

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Is Equity Release in Gateshead safe?

Taking out an equity release loan is certainly not for everyone, but it is safe.

The Financial Conduct Authority and the Equity Release Council regulate the industry as well as establishing standards and principles for all lenders, equity release specialists and solicitors who work across the industry [2].

How Much Money Can I Borrow Against My Home?

With equity release in Gateshead, how much money you are allowed to release from your home depends on a number of different factors.

Usually, the amount you are able to release from your home varies from person to person and will depend on your specific circumstances.

Your adviser will use their own equity release calculator to work out how much you can release.

Most lenders will allow you to release a certain percentage of the value of your home, usually between 20% and 60%.

Naturally, this will depend on the total value of your home. Below is a list of some other factors that will influence how much you are able to release from your home via equity release in Gateshead [3]:

Your age
Your current state of health and whether or not you suffer from any pre-existing or pre-occurring health issues
The value of your home
Your life expectancy
Your lifestyle
Whether or not you suffer from any debt
Whether or not you still have a pre-existing mortgage

It is also important to understand that there is a minimum and maximum amount that you are allowed to withdraw, which will differ between lenders.

For most people, you are allowed to release a minimum of 10% of the value of your home, which is pretty consistent across lenders [3].

With lifetime mortgages, you are usually allowed to release up to 60% of the value of your home, which could be a significant amount of money depending on the total value of your home.

With home reversion plans, you can release up to 90% of the value of your home, although this will depend on a number of factors and you will also have to sell a percentage of your home in order to do so.

Please call our 24-Hour Helpline: 0330 058 1579

What Happens with Inheritance Tax When it Comes to Equity Release?

One of the best things about equity release in Gateshead is that you usually do not have to pay any inheritance tax on the equity you receive.

The equity release money you receive is classed as a loan, instead of money earnt, which will be taken into consideration.

Unfortunately, lots of people believe the myth that you do have to pay inheritance tax on the money you receive through equity release in Gateshead, which is what puts them off the idea of releasing equity.

What Can Equity Release in Gateshead Be Used For?

Equity release in Gateshead can be used for a wide range of things, including home improvements.

Home improvements are a great way of increasing the value of your home.

This means that by the time you come to pay off your equity release loan, your house will sell for money and will pay off the loan and then some, potentially leaving some funds to go to your loved ones as inheritance.

Home improvements include things such as renovation work such as an extension or cosmetic work, such as a new kitchen or landscaping your garden.

The idea behind equity release is that you remain living in your home for as long as you live, so you might want to make some home improvements which make your home more suitable for you in old age.

This could include installing handrails, ramps for mobility scooters or wheelchairs. Likewise, you could install a wet room downstairs in case you need it in the future.

If you do not want or need to spend your equity release money on home improvements, then you could opt to spend your money on a nice holiday, a new car or helping grandchildren with University fees or house deposits.

You are able to gift your money to your friends and family, but should make your equity release adviser aware that you plan to do so before taking out an equity release loan.

Please call our 24-Hour Helpline: 0330 058 1579

The advantages and disadvantages of equity release in Gateshead

If you are considering equity release in Gateshead, then your equity release adviser should make you aware of not only the advantages of equity release, but the disadvantages too.

It is never an adviser’s job to force or convince you to take out an equity release loan by only running through the advantages of equity release in Gateshead.

So, make sure they talk you through both before you sign on the dotted line.

We have outlined both the advantages and disadvantages of equity release in Gateshead below for you, so that you can make an informed decision as to whether or not equity release in Gateshead is for you.

1. Advantages of equity release in Gateshead

There are numerous advantages to equity release in Gateshead. For example, you get access to a significant amount of cash from your home, which you are free to spend on almost whatever you like.

You can spend this on home improvements, or simply improving your lifestyle in your retirement.

Likewise, you don’t have to repay the loan until you pass away or move into care, meaning that you no longer have to worry about monthly repayments.

Your loan will also be paid off through the sale of your home. The proceeds from the sale of your home should almost always cover the loan amount.

However, if it does not then you do not need to worry as you will be protected by the no negative equity guarantee.

This guarantee is a standard guarantee, industry-wide.

It essentially means that if the proceeds from the sale of your home do not cover the loan amount, then your lender will pay off the difference.

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2. Disadvantages of equity release in Gateshead

As discussed above, it’s also important to also think about the disadvantages of equity release in Gateshead when considering your options.

Equity release in Gateshead is a fantastic option for many people, although it is not for everyone.

For example, you will be charged interest on your lifetime mortgage. This interest will compound, meaning that the overall loan amount will increase month on month, year on year.

Remember, you have to repay the initial loan amount, including any interest when you pass away or move into a care home [4].

Likewise, moving home or downsizing is harder after you take out equity release in Gateshead.

Whilst not impossible, you might struggle to move home if your lender refuses to accept your new property as part of the equity release loan.

Finally, taking out an equity release loan means that your loved ones simply won’t get as much inheritance.

The loan will need to be repaid via the sale of your home, meaning that the proceeds from the sale of your home will not go to your loved ones as inheritance.