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Lifetime Mortgage & General Equity Release Advice in Liverpool
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.
Some homeowners in Liverpool are under the impression that schemes like equity release are reserved for people living in the South with large salaries and huge properties. This is simply not the case. Equity release Liverpool is becoming more and more popular.
To qualify for an equity release loan in Liverpool, you do not have to boast a large salary. In fact, one great thing about equity release schemes is that they generally do not involve affordability checks or credit checks, so homeowners with a low income can still get involved.
As for owning a large property, this is not necessarily important. What’s important is that you have a property that is worth £70,000 or more, but this can be a small house or even an apartment.
Certain factors will affect the amount of money you can release from your Liverpool home, such as your location, the condition of your home, and the size of your home, but you will discover this when you speak to an adviser.
If you want to find out for yourself, please see our equity release calculator. It is a free tool that allows you to discover how much money you could get from equity release Liverpool. Our personalised quotes will also help you to get a realistic idea of the loan you could receive.
To be eligible for equity release, you must be a homeowner and aged over 55 years old. You can even apply for equity release where you have the power to apply under a Lasting Power of Attorney. Our advisors can connect you with solicitors who specialise in equity release during the advisory process.
All equity release solicitors are regulated by the Solicitors Regulation Authority (SRA).
Please call our 24-Hour Helpline: 0330 058 1579
Equity release Liverpool is becoming a more popular option for homeowners. This is the case for several reasons.
Firstly, myths about equity release are being busted which is encouraging homeowners to discover equity release for themselves. In the past, they may have believed that equity release in Liverpool was a scam, but now they see homeowners benefitting from it.
Secondly, pensioners are struggling to keep up with the rising cost of living without the help of a loan.
In the UK, one in 10 pensioners is calling Age Concern for issues relating to paying their bills and clearing their mortgages and equity release is a scheme that can help them to do both of these things (1).
Finally, many pensioners are watching their children and grandchildren struggle to get by as the property market is extremely challenging for first-time buyers.
With an equity release loan, they can afford to help their family members out and watch them thrive rather than suffer.
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Out of the two biggest equity release plans, lifetime mortgages and home reversions, the former is the most popular in Liverpool. People tend to prefer to take out a mortgage over selling a share of their home, as this allows them to keep ownership of their home.
What’s more, with a home reversion, the share is purchased for less than the market value, so some homeowners believe they are missing out with this option.
This is particularly true as house price appreciation is so common at the moment, as it means the lender would make more on their share of the property if their share is larger than the homeowners.
However, it is true that Liverpool home reversions are becoming more popular. The schemes are more flexible than they once were, so potential equity release consumers are drawn to the concept of selling their home and yet still being able to live in it.
When you apply for equity release, the advisor will research a range of products from equity release lenders such as Scottish Widows, Legal & General, Aviva, Liverpool Victoria (LV), Canada Life, more2life, Hodge, Just Retirement, Pure Retirement, One Family and LiveMore Mortgages.
Both the advisory and lending organisations are regulated by the Financial Ombudsman Service and appear in the Financial Services Register.
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Like any other equity release scheme, when you have a Liverpool home reversion, you can get your hands on tax-free cash lump sum. With this specific plan, you will always receive all of the cash at once (as a cash lump sum) rather than in regular instalments such as monthly payments.
This means home reversion schemes in Liverpool are great for homeowners who need access to a large amount of money in a short space of time. For example, if they need to pay for their grandchildren’s university fees, pay for a new car, pay for home improvements or pay for a once-in-a-lifetime holiday.
Another advantage of having a home reversion is that you can only have one type of home reversion so you don’t have to worry about choosing between many different options and getting overwhelmed. A home reversion plan is the same for everyone.
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If you opt for a lifetime mortgage in Liverpool, you will be able to choose between earning a tax-free lump sum of cash or receiving the tax-free cash in regular instalments.
You could even have a combination of the two, which is perfect for people who need a steady monthly income but also want to pay for a large one-off project.
Another huge benefit of Liverpool lifetime mortgage products is that you remain the homeowner (along with your partner if you took out a joint mortgage). This is very important for lots of our customers, as it means the money that is left over after your property sale (and after the lender has collected what they are owed) can go to your family.
You can save money for your family with a home reversion, but the share that you have sold will all go to the equity release provider, and this can be disappointing if the value of the share has increased by a significant amount.
Finally, though we stated that the simplicity of a home reversion can remove stress, we would also like to point out that some homeowners enjoy the flexible approach of the lifetime mortgage scheme, as they can choose a plan that is tailored to their situation.
For example, if a potential equity release consumer wants to purchase a second home to use as a holiday home, the lifetime mortgage scheme will be what saves the day, as they will not be able to do this with a home reversion, but they can with a second home plan.
We have also written a guide you can read here, which outlines the potential drawbacks of equity release.
Briefly, equity release can affect means-tested benefits you are entitled to. The Independent Financial Advisor (IFA) we refer you to will alert you to this fact. Although equity release is essentially a ‘lifetime’ product, this doesn’t mean the money will not have to be repaid one day, which is typically when you either die or go into long-term care. This will therefore reduce the value of your estate.
Also, because equity release is a loan, you will need to pay interest on that loan, which is known as compound interest. Although the initial advice is free, if you choose to go ahead and apply for equity release, expect to pay a fee in the region of £1500-£2000.
Please call our 24-Hour Helpline: 0330 058 1579
A drawdown lifetime mortgage allows you to release equity from your home in stages, as and when you need it, as opposed ‘all at once’.
Interest is only charged on the amount you withdraw, meaning you can effectively limit the amount of interest you pay when you take out this form of equity release.
This can also be an effective way to avoid losing the right to means-tested state benefits, such as council tax support or pension credits.
The key disadvantage of a drawdown lifetime mortgage is that it will undoubtedly require more admin on your part, and mean you aren’t able to access a chunk of cast straight away.
Therefore, if you need a lifetime mortgage to pay off an interest-only mortgage, then you are more likely going to require a lump-sum-yielding product.
A lump sum lifetime mortgage, is, as the name suggests, about accessing a one-time lump-sum amount of cash.
The big disadvantage of this is the amount of interest this lump sum will accumulate, particularly because equity release means you pay compound interest. This will therefore reduce the amount of money your children or grandchildren will inherit when you die or move into long-term care.
A lump sum of cash may also mean you are no longer eligible for certain state benefits you are currently claiming.
A mandatory repayment lifetime mortgage is a type of equity release scheme where you are required to make regular repayments of the interest on the loan. This could be either monthly or annually.
A traditional lifetime mortgage means interest rolls up over time and is repaid when you die or go into long-term care.
In a mandatory repayment lifetime mortgage, you actively make payments to cover the accruing interest, however, the loan principal remains outstanding.
A mandatory repayment lifetime mortgage might be desirable where you have in place a steady income to cover the repayments. This type of lifetime mortgage is going to better protect the amount of money your children or grandchildren can inherit when you die.
However, you must be confident of your ability to repay the interest, because if your circumstances change and you fail to meet the payments, this could mean you could face consequences such as foreclosure.
Yes, you can discuss the decision to take out equity from your Liverpool property with your family.
They may encourage you to consider aspects of equity release that haven’t yet crossed your mind, and this is great as it’s better to analyse the scheme now rather than when you’ve already committed to it.
Your family will be affected if you decide to release equity in Liverpool, so we advise you to discuss the consequences with them.
This will involve informing them that their inheritance will be reduced, but explaining that you will benefit from the money in your retirement, and discussing the significance of this for you (2).
If you definitely plan on gifting money to them, this is also the time to mention this plan, as they will realise that the gifted money may outweigh the reduced inheritance.
However, it goes without saying that you shouldn’t broach this subject if you aren’t confident that you are going to spend your loan on them.
Not everyone is blessed enough to have a supportive family, so we certainly wouldn’t encourage anyone and everyone to involve their family in the decision.
Do not discuss this subject with your family if you worry that they want to take advantage of you financially, they have been unsupportive about finances in the past, or they will become angry about their reduced inheritance.
This is very different to family members who are concerned about you and want to make sure equity release is the right scheme for you. In this situation, you should listen to their concerns, but remember that the decision is ultimately yours.
Please call our 24-Hour Helpline: 0330 058 1579
Some of our customers choose to take out equity in Liverpool without involving their partner. It is usually best to take out a joint mortgage with your partner, as the process will be much simpler when the equity release scheme comes to an end.
The scheme will finish when the last equity release customer passes away or moves into long-term care. This means that when the first partner passes away or goes into care, the remaining partner can continue to live in their home and use the equity release loan.
However, if you have taken out equity alone in Liverpool, your partner would, unfortunately, have to move out and not use the equity loan when the scheme comes to an end. This can be very stressful for people in their old age to deal with, so we advise against it.
Having said that, we are aware that sometimes people are eligible for equity release in Liverpool and their partner is not, and they may not be prepared to wait until their partner is entitled to a loan.
For example, if you are 60 years old and your partner is 50 years old, you may feel obliged to take out an individual lifetime mortgage as you do not want to wait for 5 years until they become eligible.
Please call our 24-Hour Helpline: 0330 058 1579
The main disadvantage of equity release is, of course, the amount you borrow will ultimately need to be repaid. When you die, the bill for equity release can be a significant portion of your estate.
You will need to pay the interest rate, which is typically between 5-7% (which is typically higher than a conventional mortgage), but also the interest you pay under an equity release mortgage compounds, so you pay interest on interest.
Also, when you die, your children (or grandchildren) will receive less money because of the equity release bill which must now be repaid.
However, it’s possible to repay an equity release mortgage as you go along, which can minimise the amount of interest you pay back. This is known as a voluntary repayment plan.
When you go through the equity release process with a financial advisor, you will be dealing with a professional who will make you aware of the drawbacks of equity release, and all the alternatives that might help you achieve the same objectives more cheaply.
For instance, you might be able to access money via pension credit. Check your eligibility for pension credit here.
You also have the power to complain to the Financial Conduct Authority (the financial regulator) if you are unhappy about the advice you received at a future date.
Because all advisors are registered on the FCA Register, you have recourse for compensation if your complaint is upheld.
In summary, here are the risks to consider before taking out equity release:
You do not pay tax on equity release. This includes both a lifetime mortgage and a home reversion plan. In fact, equity release might mean you pay less tax on your estate when you die, and so equity release may form part of inheritance tax planning.
You don’t pay tax on equity release because it is considered to be a loan, as opposed to income. However, the interest payments you make on an equity release loan is not tax deductible, so it won’t help you reduce other types of taxes, such as income tax.
We know that there are many other options for boosting your retirement income that do not involve having a home reversion or a lifetime mortgage in Liverpool.
Some of these options may not apply to you, or you may have tried and failed to implement them, but perhaps you have never considered some of them.
Firstly, an obvious option is to take out an unsecured loan. This would not reduce the amount of money you could leave to your family, and the interest would not accumulate as much as equity release interest as you would not be borrowing for the rest of your life.
However, keep in mind that unsecured loans require affordability checks and credit rating checks. If you earn a low income or you have a bad credit history, you may not be eligible for this.
What’s more, though the overall roll-up interest may be lower, the average interest rate is likely to be higher with a traditional loan.
Secondly, you could start your own business as a way to earn more money in Liverpool. This could keep you busy in retirement and you would have the freedom of choosing your own hours and holidays, which you most likely did not get when you were at work.
On the other hand, you would probably need to put some money into this business, and you may not be in a position to do this. You would also be taking a risk that the business ended up succeeding, otherwise you would have wasted your time and money. Finally, you may not have the energy to start working again, even if the hours are reduced.
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Finally, why not consider renting out a room in your house for a consistent rental income?
This would work very well if you live in a desirable area and perhaps you would like some company in the evenings. It’s also a good idea for anyone whose home is larger than they need, and you have a room that you never use.
However, not every pensioner is comfortable with the idea of having a stranger in their home, and there is a chance that your safety could be compromised.
What’s more, if you live in a very rural area, you may not find anyone who wants to live with you. There is always the option of using a platform such as Airbnb for holidaymakers, as this wouldn’t involve as much commitment from their side.
If you are applying for equity release as a means of tackling the cost of living crisis, then know it might be more suitable to first seek out the help of an organisation that can help you better budget your expenses.
Below, we list a range of organisations that can do just that in the Liverpool area:
Address: Unit 8, Broad Ln, Liverpool L11 1AD
Telephone: 0151 256 5582
Website: https://www.liverpoolcommunitycreditunion.co.uk/
Address: Garston Business Centre, 2 – 4 St Mary’s Rd, Garston, Liverpool L19 2RY
Telephone: 0151 448 0565
Website: https://riversidecreditunion.co.uk/
Address: 2 Speke Rd, Garston, Liverpool L19 2PA
Telephone: 0151 522 1400
Website: https://www.citizensadviceliverpool.org.uk/
Address: 37-39 Walton Rd, Liverpool L4 4AD
Telephone: 0151 522 1400
Website: http://www.citizensadviceliverpool.org.uk/
Address: 242 Picton Rd, Liverpool L15 4LP
Telephone: 0151 522 1400
Website: http://www.citizensadviceliverpool.org.uk/
Address: 141 Park St, Liverpool L8 6QF
Telephone: 0151 708 5515
Website: https://centralcu.co.uk/
We have also written a guide to help you implement better budget planning.
Other organisations you can reach out to include StepChange Debt Charity and National Debtline.
Downsizing means selling your current property and buying a cheaper home as a way of getting your hands on cash. However, you will typically have to buy a property that is smaller than your current home, hence the name ‘downsizing’.
Downsizing means you can acquire liquidity in a far cheaper way compared to a lifetime mortgage.
Make no mistake: downsizing will give you access to cash, and generally means you are not reducing the amount of inheritance your children or grandchildren will receive when you die to the same degree which is typically the case with equity release.
However, you will have to sell your current home. Not everyone will be willing to sell their current home, particularly if they have become emotionally attached to it over the years.
Please call our 24-Hour Helpline: 0330 058 1579
We are ready to discuss equity release in Liverpool, are you?
To make an enquiry by telephone, call us on 0330 058 1579. You could also send us your contact details here and we will get in touch with you as soon as possible for free initial advice on Liverpool equity release.
Not sure what to ask us? Here are some common topics equity release customers are curious about: the possibility of making repayments, the concept of a no negative equity guarantee, the role of the Equity Release Council, and the cost of independent advice.
If you aren’t yet sold on Liverpool equity release, please still get in touch and we will address any concerns you have, no matter how negative. Our article on common equity release myths may also help you to be more positive about this scheme.
When it comes to using equity release products, whether it be home reversion schemes or lifetime mortgages, the options are practically endless. Don’t believe us? Head to the plans section of our site.
Our advisors are able to assist you across Liverpool and Merseyside in Aigburth, Allerton, Anfield, Belle Vale, Broadgreen, Childwall, Crosby, Croxteth, Dingle, Dovecot, Edge Hill, Everton, Fairfield, Fazakerley, Garston, Gateacre, Gillmoss, Grassendale, Hunt’s Cross, Kensington, Kirkdale, Knotty Ash, Mossley Hill, Netherley, Norris Green, Oglet, Old Swan, Orrell Park, Prescot, St Michael’s Hamlet, Sefton Park, Speke, Stoneycroft, Toxteth, Tuebrook, Vauxhall, Walton, Wavertree, West Derby, Wirral and Woolton.
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.
If you are unhappy about the legal advice you receive in relation to equity release, you can lodge a complaint with the Legal Ombudsman.
[1] Rich and poor at the poor same time? https://www.liverpoolecho.co.uk/news/liverpool-news/rich-poor-poor-same-time-3523364
[2] Will using equity release affect my children’s inheritance? https://www.elystandard.co.uk/lifestyle/property/equity-release-on-your-property-8203216
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