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Learn about how to Get a Lifetime Mortgage or Home Reversion in Kent
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.
Fortunately, if you are interested in equity release mortgage in Kent, there are many routes you could take. To get a general idea of how you can do this, read the following article, which answers the frequently asked questions we often receive about equity release in Kent.
If this article isn’t enough for you and you want a more realistic idea of how releasing equity in Kent could affect you personally, reach out to us and we will advise you on how to release equity from your home in a safe, secure manner.
Below, we attempt to answer some of the questions about equity release and the overall equity release mortgage process involved.
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Many pensioners have worked their whole lives and tried to save what they can, but with the cost of living rising, they did not predict that they would need so much money in retirement. For this reason, they are looking for alternative ways to top up their money.
An equity release scheme in Kent is a great way to do this, as there are no immediate negative consequences in the sense that the loan you take out does not have to be paid, so you can use it to make your life better in the present moment through things like holidays, side projects, and home improvements.
Essentially, equity release Kent is about accessing money that is currently locked in your property and listed as an asset so that you can benefit from your assets now rather than waiting until you have passed away.
Evidently, your attitude to equity release will partly depend on your plans for an inheritance, as the less determined you are to leave all of your assets to your beneficiaries, the more appealing taking out a loan will be. Having said that, it is possible to release equity and still look after your family financially.
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The amount that you can release from your Kent property depends on the value of your home, your age, and the type of home you live in. There are also additional factors that can come into play before you are accepted onto a scheme, such as your credit rating, your location, and how much interest you are willing to pay.
It is certainly safe to take out equity, as at the end of the day, this money was only ever going to be passed on when you die. However, you do need to carefully consider it before doing it, as there are certain risks involved.
You must make sure you are prepared to be in debt for the rest of your life, and to keep your property in Kent as your main residence.
With a home reversion, you are selling part or all of your property to an equity release provider and, in turn, benefit from a lump sum of tax-free cash. This means you are renouncing your status as a homeowner yet remaining in your property until you die or go into long-term care.
The reason providers are interested in purchasing a share of your property is that they know the value is likely to increase over time, so they will reap the benefits of the share when your home is eventually sold.
On the other hand, a lifetime mortgage involves taking out a loan, the details of which will depend on the arrangement you select, and not having to repay the money until you pass away or move into long-term care.
There are many different kinds of lifetime mortgage available in Kent, including: income plans, interest-only plans, voluntary repayment plans, buy-to-let plans, second/holiday home plans, enhanced/ill-health plans, lump sum plans, and drawdown plans.
You can choose how you receive this money (i.e. all at once, as a monthly payment, or to withdraw as and when you wish), and we will advise you on the wisest option if this is something you are unsure about.
In terms of interest, there is nothing to worry about with a home reversion in Kent as you receive all the cash at once, whereas some lifetime mortgage schemes will have high-interest rates e.g. enhanced plans and drawdown plans.
It is possible to select one with lower interest rates, such as a lump sum scheme or a voluntary repayment plan.
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No, your property does not have to be in Canterbury or Maidstone for you to get involved with Kent equity release. The main requirement is that your property is worth over £70,000. However, if you are in Canterbury, you may have more resources to work with as there will be more solicitors, lenders, and equity release advisers in this area.
Even if your property is not in Kent, we can still help you out. Have a look at our home page and discover all the areas we work in, including Scotland (Lanarkshire, Fife, Aberdeenshire, Glasgow, Edinburgh), England (Northumberland, Yorkshire, Derbyshire, Nottinghamshire, Oxfordshire, Cambridgeshire, Devon, Cornwall), and even Spain, Italy, Mauritius, and South Africa.
This list is not exhaustive, so do not hesitate to contact us if you live somewhere else and you would like equity release advice. We are constantly adding new towns, cities, counties and countries to our list, so yours could be next.
Yes, there are other ways to take out an equity release Kent. The main schemes that we haven’t yet discussed are retirement interest-only mortgages and retirement mortgages.
Both of these options include arranging for the loan to begin before or during your retirement, so it is closely linked to the idea that you will need an extra income after leaving work.
With the interest-only option, you have the opportunity to pay back interest each month which reduces the overall amount you are borrowing.
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There is never an obligation to take out equity, so you are free to choose an alternative way to earn more money. Perhaps the most obvious way is to take on a part-time job, however, this is of course too taxing for many people who want to simply retire and not worry about earning an income for the rest of their life.
Another option is to downsize, but again, this is stressful as you must go through the process of moving house, and you are not guaranteed to be saving a huge amount, as depending on the property you select, you could still be paying out a lot in bills.
This is why many people prefer equity release – you can release money secured against your home without having to move or face the stress of work once again.
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Yes, if you go about equity release in a sensible way, it can be a great way to top up your money without having to return to work. If we don’t believe equity release in Kent would benefit you, we will tell you this in our consultation. However, if you are eligible, it’s something to consider.
Most other loans require you to payback the money while you are still alive, so you may fear living in debt for the rest of your life. However, debt from equity release is not the same thing, as you can relax knowing that your property’s sale will cover all of the costs of the loan you have borrowed.
Most schemes have a no negative equity guarantee, so even if your property falls in value and the sale does not cover the costs, no one will be expected to intervene and pay more. This is great news for people who want to leave their money to someone, as you can rest assured that some of your money will go to your loved ones.
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Whilst equity release will give you quick access to cash, and whilst this won’t be repayable generally until after your passing, your estate will ultimately bear the cost. This will reduce the size of your children’s or grandchildren’s inheritance. Not only will they need to pay off the principal on the equity release loan, but also the interest. However, the loan is typically not repayable until you die or go into long-term care.
Equity release means your estate will have to pay compound interest, which is typically not an insignificant amount of money, although there are ways to mitigate the amount of interest you pay, such as taking out a drawdown equity release plan, as opposed to a lump sum plan. It’s also entirely possible to pay back an equity release loan whilst you are alive, although some plans may carry an early repayment charge. This is known as a voluntary repayment plan.
Before you formally take out equity release, the professional advisor is legally obliged to point out to you all of these drawbacks of equity release. If you are unhappy about the advice you have received when applying for equity release, you are entitled to complain via the Financial Conduct Authority’s complaints procedure. You can learn more about this here.
It’s also true that getting equity release may mean you no longer qualify for certain state benefits, and you’d need to inform the Department for Work and Pensions if this applies to you. This is because most state benefits are means-tested. You can read this guide to learn about how equity release may impact your ability to claim Pension Credits if you are already doing so.
The main requirements for equity release and lifetime mortgages are: to 55 years old or more, to own your own property, and to own a property that is at least £70,000. For a home reversion, the difference is that you must be at least 65 years old.
The reason that you must be in your later years is that there are many other loans available to young people, but Equity Release is specifically designed for people heading towards retirement who can offer providers a significant amount given that they own a home that is worth at least £70,000.
The older you are, the higher the loan you could be offered with equity release, so there is very much a focus on pensioners being able to lend money after spending so many years hard at work and yet still being disadvantaged when it comes to the rising costs of living.
You can learn more about the cost of equity release here.
However, if you are releasing equity solely to combat the cost of living, it might be better first to try to see if you can better manage your budget. Below, we list organisations that may be able to help in Kent:
Address: civic centre, Windmill St, Gravesend DA12 1AU
Telephone: 0808 278 7810
Website: http://www.citizensadvicenwk.org.uk/
Address: Maidstone Community Support Centre, 39-48 Marsham St, Maidstone ME14 1HH
Telephone: 0333 321 9050
Website: http://www.kentsavers.co.uk/
Address: 43 Stone St, Faversham ME13 8PH
Telephone: 0808 278 7979
Website: https://citizensadviceswale.uk/
Address: Castle, Castle St, Tonbridge TN9 1BG
Telephone: 0808 278 7810
Website: https://www.citizensadvicenwk.org.uk/
It may also be beneficial to contact national organisations such as StepChange or the Money and Pensions Service, or inquire about claiming Pension Credits.
Furthermore, equity release won’t always be the most suitable option. To see why this is so, please read this article on the drawbacks of equity release. If you feel the costs of equity release are too great, then you may be better off first assessing the alternatives to equity release.
Please call our 24-Hour Helpline: 0330 058 1579
Many people believe that once you are on an equity release scheme in Kent, you are trapped and you cannot move home. This is not true as a blanket statement.
Sometimes, it is difficult to move home as your provider expects you to reside in your current home permanently.
However, if your adviser is a member of the Equity Release Council (ERC), the company is required to provide you with a ‘suitable alternative property’ if you request to move, so you will not be trapped.
If you do move home in Kent, keep in mind that your loan amount could change. With a lower value property, you may have to repay some of the loan to make up for the fact that the provider will benefit less from the sale, whereas securing a higher value property could see you accessing a higher loan.
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As we have briefly mentioned, taking out equity in Kent can affect your inheritance. However, we would like to explain this in more detail, including discussing what happens with inheritance tax.
Firstly, when we say your inheritance is affected, we mean that taking out equity usually involves a loan, so by definition, you will get into debt. This debt may take away from what your family could receive from you when you pass away.
With a home reversion, there is no loan, but your family will not be able to inherit all of your home as some of it will belong to a provider.
Having said that, if you need to protect inheritance for your beneficiaries, it is certainly possible to do so. You could either opt for a home reversion in Kent and separate your property so that some of it is reserved for family, or you could look for a mortgage that offers inheritance protection.
In terms of inheritance tax, your family could be paying much less if you release equity while you are alive. This is because the money you gain from equity cannot be taxed for inheritance.
Furthermore, if you have supported a loved one financially with your money from equity, the money you gifted them will not be liable for inheritance tax after seven years.
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Yes, there are many places you can go to for independent financial advice in Kent that is specialist and unbiased. You could either find a specific equity release firm, a charity, or an independent equity release adviser.
We highly recommend speaking to one of our advisers who will help you understand the features and risks involved with equity in Kent, meaning they will lead you to an informed decision based on your individual circumstances.
It may seem far-fetched that you could access the money tied up in your home and spend it on anything you would like, but this has been happening for many years, and as long as you find an adviser who is regulated by the financial conduct, it is a very safe process.
When you meet with a financial adviser, provided the adviser or the firm is a member of the ERC and regulated by the FCA, they will offer advice about the potential benefits and risks of an equity release in Kent.
This means they should not be pressuring you into taking equity, but instead they should give you an accurate picture of what it would look like, whilst encouraging you to consider your options.
We recommend that you ask the adviser for a personalised illustration as this will show you exactly how you could release equity from your property, keeping in mind your financial situation, the value of your home, and other significant factors.
If you decide to go ahead with equity release, advisers in Kent will show you how you can get started by putting you in touch with a lender.
We review a variety of equity release lenders or professional advisors here:
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You will also need to consult a solicitor when you take out a lifetime mortgage or a home reversion in Kent, and this is because there are legal processes that must take place before you can access your money. They will charge you for their time, but it shouldn’t be a huge amount.
The main processes will be searching your property and investigating the title deeds, and it is vital that you do not bypass this process as you don’t want to get into any trouble for not abiding by the law when you take out equity.
Equity Release Council rules means you are entitled to instruct your own solicitor during the equity release process. You can find a local solicitor on the Law Society of England and Wales’ website.
Please contact us for a specific quote on how much equity you could release in Kent, as well as how to begin the equity release process. There are many types of equity release, and we want to make sure you are familiar with each one before you know which one you want to opt for.
As a borrower, we are aware that you are in a vulnerable position when you decide to take out a loan in Kent, so we want to make sure you have access to impartial advice.
This includes being aware of the best mortgage advisers, how to get legal advice, whether to release a lump sum or smaller amounts, what happens with your pension, and whether you can buy a new home as an equity release consumer.
Overall, equity release is a way to continue living in your home in Kent while benefitting from extra funds that you can put towards something that will boost your quality of life.
Why not browse our website to find out more? We have compiled much of the information here, but we highly recommend visiting our blog, our help centre, and our plans section for further details.
You can also complete our equity release calculator.
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