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Lifetime Mortgage & General Equity Release Advice in Leicestershire
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.
If you don’t understand equity release jargon, you won’t get far in your research of equity release Leicestershire. We’d like to introduce you to five terms that will hopefully facilitate your understanding of equity release in Leicestershire.
An equity release loan is a type of secured loan. This means that you are borrowing money against your Leicestershire property, so the equity release lender is prepared to offer you money as they are entitled to sell your home when you pass away (or move into long-term care) and collect the money that is raised from the sale (1).
The reason it is rare for affordability checks to take place for equity release applicants is that they already have a valuable home to offer, so their income and their credit rating is not as relevant as it would be if they wanted to borrow money in a traditional way (which would involve monthly repayments).
Bridging finance is a way to access money as a short-term solution to your problems. An example of this would be purchasing a holiday on a credit card, and then repaying the money within a year.
Some people choose to take out equity in Leicestershire as a way of bridging finance. However, this should generally be avoided as equity release is designed for people who are prepared to be on the scheme for the rest of their lives.
The loan-to-value ratio tells the equity release lender how much risk is involved with lending money to a certain equity release consumer in Leicestershire, based on the value of their property.
If there is little risk involved, the loan-to-value ratio will be low, but if the offer is very risky, there will be a high loan-to-value ratio.
The early repayment penalty is a fee that is charged to some Leicestershire equity release consumers when they request to leave the scheme. The cost tends to be 25% of the amount of money borrowed.
This fee is not charged by all lenders, and it is not applicable for all equity release schemes, but it is something to keep in mind as it is quite common.
The no negative equity guarantee is increasingly common in modern equity release schemes in Leicestershire. It is a way of protecting the equity release consumer by promising that they will never have to pay back more than they borrowed.
This means that if their property decreases in value, and therefore the lender receives less money from the property sale, the customer’s family does not have to pay back any more money.
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Most people pursue equity release Leicestershire as they desperately need access to money that does not need to be repaid, but some people simply want to make the most of their retirement. Here are a few reasons to consider equity release in Leicestershire.
It is extremely common for equity release consumers to use their loan to pay off existing debts.
This is because traditional debt must be repaid on a regular basis, and there is a deadline for total repayment, but with an equity release loan, you do not need to worry about spending most or all of it as it does not need to be repaid.
You can pay off any type of debt with an equity release loan in Leicestershire, but many people choose to pay off their traditional mortgage. This can be a huge weight off their shoulders as they no longer need to budget for monthly mortgage repayments.
If your income is sufficient to cover bills and other essentials, you may want to use your equity loan to add some luxury to your post-work life. There is no end to fun things you could spend your equity loan on, but why not consider a dream family holiday, a brand-new car, or a new house?
There are some plans designed for specific purchases, so make sure you speak to an equity release adviser in Leicestershire about your intentions for equity release. For instance, if you are interested in getting a holiday home, they may recommend the holiday home lifetime mortgage.
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The rising cost of living is not only affecting people in their later years. Many young people and young families in Leicestershire are suffering from the sky-high inflation that has impacted the UK over the last year.
Perhaps you have a younger relative who is not eligible for equity release, but would benefit from a financial gift from your equity release funds? Some customers gift their friends and family with a lump sum, but others pay for something specific for them e.g. a wedding or monthly rent.
The interest rates on equity release are some of the lowest that you will see. This makes the scheme very appealing to people who are fed up of paying out an unreasonable amount in interest.
It goes without saying that you will owe less interest the older you are, as you will be on the scheme for a shorter amount of time.
There are other factors that influence how much interest you will pay, so we encourage you to speak to an adviser to discover what your payments could look like with equity release in Leicestershire.
Incredibly, equity release funds are free of tax, which cannot be said for most other sources of income (2). Neither income tax nor capital gains tax is applied to money released from your home, so equity release is a great way to access tax-free cash.
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There are various requirements to take out equity in Leicestershire, so we cannot argue that anyone can do it. However, the main lending criteria is related to age and property value.
If you are above 55 years old and your property is worth at least £70,000, other factors are largely irrelevant – you still have a good chance of being able to release equity in Leicestershire.
This includes people who are in debt, people who do not have a high income, people who live in the most rural parts of Leicestershire, and people who are claiming benefits. You may not be eligible for every single plan or be accepted by every single lender, but there is usually a plan and a lender out there for you.
Perhaps the best thing about equity release in Leicestershire is that you will receive money that you do not need to pay back. Whether you request a cash lump or regular payments, you can enjoy the money however you would like to without worrying about being able to afford repayments.
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As much as we love to promote equity release in Leicestershire, we are also passionate about being realistic with our customers. Here are some reasons you may want to refrain from taking out equity in Leicestershire.
Equity release is not free; there are fees involved with applying to an equity release provider, meeting with a solicitor for legal advice, having a property valuation, and other essential steps that occur with equity release.
Though you can use your equity loan to pay for these fees, you should still keep in mind these costs as it may affect your decision to release equity, especially if your loan would already be on the lower side.
Equity release in Leicestershire is not something you can access overnight. It requires research, meetings, and plenty of waiting. We predict that it will take up to 8 weeks from start to finish.
If you are desperately in need of money, this is something to keep in mind. There may be a quicker way for you to boost your income in the short term before you turn to equity release in Leicestershire.
While it is true that interest rates tend to be low with equity release, the nature of the scheme means that you can end up owing much more interest than you would with a traditional scheme. This is because if you do not repay the interest, it accumulates.
You can avoid this by selecting an interest-only lifetime mortgage or a home reversion in Leicestershire. Speak to an adviser about these options if you are anxious about accrued interest.
When you make the decision to take out equity in Leicestershire, you are reducing the value of your property, which will evidently affect the amount of money your family inherits when you die.
This is certainly something to consider if you want to pass on a significant amount of money to your beneficiaries.
Though repayment may not be necessary, the fact is that you are still getting into debt when you release equity in Leicestershire. If you have other sources of income to rely on, such as a pension or savings, you may prefer to avoid equity release in order to not be in debt.
For the above reasons, we highly recommend you read our articles on the drawbacks of equity release and the alternatives to equity release. Doing so will help you make the right choice when it comes to equity release, once you have all the facts to hand.
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 Leicestershire:
Address: 1st Floor, Epic House, 2 Charles St, Leicester LE1 3SH
Telephone: 0300 303 4923
Website: http://emma.uk.net/
Address: Martyrs Community Hall, 21 Westcotes Dr, Leicester LE3 0QT
Telephone: 07926 086238
Website: http://moneymattersleicester.org/
Address: 74 Queens Rd, Clarendon Park, Leicester LE2 1TU
Telephone: 0116 270 6049
Website: http://www.ageukleics.org.uk/
Address: 46 Humberstone Gate, Leicester LE1 3PJ
Telephone: 0116 299 2233
Website: http://www.ageukleics.org.uk/
Address: Lansdowne House, 113 Princess Rd E, Leicester LE1 7LA
Telephone: 0116 299 2266
Website: http://www.ageukleics.org.uk/
Address: Trinity Hall, 9905/PO Box 9905, Leicester LE1 8DP
Telephone: 0116 319 2636
Website: https://www.trinitymoneyadvice.org.uk/
We also wrote a guide to help you better plan your money to meet the challenges posed by the rising cost of living.
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For the vast majority of equity release consumers, the equity release process in Leicestershire will take around 7 weeks. However, some people are subject to delays that lengthen this process, and others are lucky enough to receive their loan in just a few weeks.
Some tips for speeding up the equity release process are: see an equity release adviser as soon as possible, research the equity release plans in detail, free up your schedule to attend meetings, and find a solicitor to help facilitate communication.
We cannot tell you how much equity release in Leicestershire will cost for you, as the price is different for everyone depending on the choices they make.
For example, some people manage to seek free independent advice at the beginning of the scheme, whereas others choose to pay a hefty advice fee, so these people would be paying a vastly different amount of money overall.
You can expect to pay no more than £3000 for equity release in Leicestershire, but it is possible to pay much less if you are on a budget.
No – the equity release scheme is available all over the UK and also in other countries. Fortunately, the process is a universal one, so once you know how home reversions and lifetime mortgages work in Leicestershire, you know how they work everywhere.
To find out which other areas we work in, head to our homepage and look at our list. Our advisers are happy to help people living in any of these areas.
Please call our 24-Hour Helpline: 0330 058 1579
There are many companies offering equity release in Leicestershire advice, so why should you choose Equity Release Warehouse?
We offer an initial consultation for all customers that is completely free of charge and free of obligation. This means you can access professional advice without spending a penny, and there is no pressure to go ahead with equity release at the end of the appointment.
You can arrange a consultation with us by calling us on 0330 058 1579 or requesting a call from a member of our team. If you’re still working in the week, don’t worry – our phone lines are open from 8 am to 8 pm every day of the week, so you’ll be able to catch us on evenings or weekends.
Whether you are set on equity release in Leicestershire or you are concerned about the risks, please get in touch so that we can talk it through with you and help you to make the best decision for your future.
In the meantime, have a look at our equity release calculator and our list of equity release mortgages to prepare you for your conversation with an equity release specialist.
Access help and advice today across Leicestershire in Anstey, Ashby-de-la-Zouch, Aylestone, Birstall, Braunstone, Broughton Astley, Coalville, Countesthorpe, Desford, Earl Shilton, Glenfield, Groby, Hinckley, Ibstock, Leicester, Loughborough, Lutterworth, Market Harborough, Markfield, Melton Mowbray, Oadby, Oakham, Ratcliffe On The Wreake, Rutland, South Wigston, Syston, Thornton, Thurmaston, Uppingham, Whetstone and Wigston.
[1] Secured and unsecured borrowing explained https://www.moneyhelper.org.uk/en/everyday-money/credit-and-purchases/secured-and-unsecured-borrowing-explained
[2] Is money received from equity release taxable?
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