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Lifetime Mortgage & General Equity Release Advice in Luton
Reviewed by Tom Philips
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If you are aged 55 or over and are struggling with your finances in the current climate, then you might want to consider equity release Luton.
Over the past few years, there has been a rapid increase in house prices, which means that a lot of people aged 55 or over are now sitting on large-value assets when it comes to their home.
Not only does their house equity include their deposit and monthly mortgage repayments, but it will also be largely affected by the increase in value of the house. For many people, this could be tens of thousands of pounds.
Interestingly, this has come at a great time for retirees. This is because due to Covid-19, lots of pension schemes have failed to deliver on their returns, along with the increase in the cost of living to mean that a lot of people who are retired are struggling to afford to live right now.
Due to this, a lot of pensioners are known as ‘asset rich, cash poor’ meaning that they might be struggling day to day, despite the fact that they have a significant amount of money and equity built up in their home over a number of years.
Because of this, lots of people aged 55 or over are now considering an equity release plan. This will allow individuals the chance to gain access to the money built up in their assets, whilst allowing them to stay in their home for as long as they want.
You can find out how much you can release by using our equity release calculator.
All equity release products are regulated by the Equity Release Council. This means you benefit from a no negative equity release guarantee.
All advisors are regulated by the Financial Ombudsman Service (OBS) and Financial Conduct Authority (FCA) and appear on the Financial Services Register. Advisors also have equity release-specific qualifications, issued by The London Institute of Banking & Finance (LIBF) such as the Certificate in Mortgage Advice and Practice (CeMAP).
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Equity release Luton is a fantastic way of gaining access to the equity that has been built up in your home over the years that you have owned it.
When you buy a property, you put down a deposit to secure the property. This is usually 10% of the total value of the property, but can sometimes be as much as 20% or 30%, depending on how much cash you have in the bank.
On top of this, you will pay monthly repayments to your lender, some of which go to the bank and some of which go into the equity of your house.
Over a number of years, this equity builds up. The longer you own your property, the more equity you build up in your home. Therefore, the more property you start to own.
When individuals reach a certain age, they might need to gain access to this equity for a number of different reasons.
Equity release in Luton is a fantastic option for those aged 55 or over because it allows individuals to remain living in their home, whilst gaining access to their equity for them to spend and enjoy.
By the time many people hit retirement age, most people simply do not want to move house.
This could be for a number of different reasons, such as simply not being able to deal with the stress, struggling to move for logistical reasons, not wanting to move away from friends or family members, and not wanting to move because they have created so many memories in that home that it would be too painful and sad to leave.
The other great thing about equity release in Luton is that you are also able to spend your equity release in a number of different ways.
There are no real restrictions behind what you can and what you can’t spend your equity on.
Lots of people choose equity release in Luton because they want to do some home improvements, and others because they want to treat themselves to a nice holiday or a nice new car.
With the cost of living higher than it has been for decades, individuals might also choose to release equity from their home to help them live a more comfortable life right now, and to feel more assured and comfortable throughout their retirement.
Lots of people at retirement age also choose to release equity from their house in Luton because they want to help family and loved one with things like University fees and house deposits.
It’s also a popular choice to repay an existing mortgage. When you take out equity release, your existing mortgage is repaid. All secured debt must be repaid for an equity release application to proceed.
If you are considering equity release in Luton, then it is important that you consult with an equity release advisor for advice and support.
All advisors we refer you to are Independent Financial Advisors (IFAs). This means they can advise you on lenders across the market, such as Scottish Widows, Legal & General, Aviva, Liverpool Victoria (LV), Hodge, Canada Life, more2life, Just Retirement, Pure Retirement, One Family and LiveMore Mortgages. All lenders are backed by the Financial Services Compensation Scheme.
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Your advisor should be fully qualified, like our advisors and specialists at Equity Release Warehouse.
Your equity release specialist will be able to talk you through the process from start to finish, and will be able to guide on the different equity release plans, so that you make the very best, and most informed decision.
It is also important to understand that in order to qualify for equity release in Luton, you will need to meet your lender’s qualification criteria.
Whilst each lender has different qualification criteria, there are a number of factors to consider when it comes to qualifying for equity release in Luton.
For example, for most lenders across Luton and the rest of the UK, you will need to be the following.
When it comes to equity release in Luton, you will also need to consider how old you are, and how healthy you currently are. These two factors will play a huge role in how much equity you are able to release from your house.
Lots of people who want to release equity from their house in Luton might feel confused or anxious about how the equity will be repaid.
It is important to understand that you do not have to repay any of the equity release until after you sell the house when you pass away or move into long-term care.
However, it is important not to forget about the interest on the equity release loan. As with any loan, interest will quickly build up into compound interest if it is not paid off quickly.
Therefore, individuals are able to pay off their interest on the equity release loan in monthly repayments, or are able to allow this interest to compound into compound interest, which will need to be paid off when the borrower sells the house due to their death or moving into long term care.
There are two main types of equity release in Luton and across the rest of the UK, which includes a lifetime mortgage and a home reversion plan. These two plans are the most popular types of equity release, and both have their own pros and cons.
It is important that you speak about these two options and their pros and cons with your equity release specialist, who will provide you with all the information you need whilst offering you their advice and insight.
Whilst equity release specialists are there to help, support and guide you through the process, it is important to understand that they will not put any pressure on you to make a decision.
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A lifetime mortgage is the most popular and widely used form of equity release in Luton and across the rest of the UK.
A lifetime equity release mortgage is a form of mortgage which allows individuals to release equity from their home, tax free.
However, you will be charged interest on this loan, as you are with any other form of mortgage or loan.
Whilst the interest rates with a lifetime mortgage are not unreasonable, they are usually slightly higher than the normal interest rates you would get with a normal, ordinary mortgage you would use to buy a house.
It is important to understand that the interest on the equity release loan will build up into compound interest if it is not paid off in monthly instalments, which is what is recommended by most equity release specialists.
If you choose not to repay the interest on the equity release loan in monthly repayments, then this will build up into compound interest and will be repaid from the sale and proceeds of the house when you come to sell upon your death or moving into long term care.
In some circumstances, the value of the original loan, with the added interest becomes higher than the sale of the house.
If this does happen with you, then it is important to understand that the equity release lender takes on the burden of the loss. Therefore, you or your next of kin will not have to pay the difference or be in any form of debt.
If the value of the property exceeds the value of the loan plus the interest on the property, then the added proceeds will be passed onto your next of kin and inheritance, depending on what your Will says.
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A home reversion plan works slightly different to a lifetime equity release mortgage, and is slightly less popular and common throughout Luton and the rest of the UK.
A home reversion plan allows individuals to sell a certain share and percentage of their home, in return for access to the equity in their property.
When you pass away or move into long-term care, the equity release lender receives a certain amount of the sale of the property, depending on what percentage of the property you sold to the lender.
For example, if an individual sells 30% of the house, in return for access to their equity, then the lender will receive 30% of the sale proceeds of the house when the individual passes away, moves into long-term care and sales up.
When someone opts for a home reversion plan, they will be selling the percentage of their property for a lot less than the market value of their home.
For example, if you go to sell 30% of your property which has been valued at £300,000 then the lump sum that you receive will be much less than the £90,000 market value of the 30% share of the property.
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Are you living in Luton and are considering equity release in Luton? If you are, then it is important to think about how much your house might be worth.
Property investment has always been a great and trusted way to make a sound and safe investment. This is because property prices usually increase over the years.
According to Rightmove [1], the current average price of a house in Luton is £294,923. Most of the houses in Luton are semi-detached properties.
However, the average semi-detached property sold for £318,167. Most terraced houses sold for £262,885 and most flats sold for £164,991 [1]. Between 2018 and 2019, house prices increased by 13% in just one year [1].
As you can imagine, many people living in Luton, aged 55 or over, with house prices of this value will be sitting on a large amount of equity.
During these tough times, lots of people across Luton might be considering releasing this equity to help them to live a more comfortable and relaxed retirement.
If you live in Luton and think that the value of your house has increased in value significantly over recent years, then you should speak to a member of the Equity Release Warehouse for advice and support on how to get your home valued, and how to find out how much money you are able to release from your home.
Please call our 24-Hour Helpline: 0330 058 1579
If you are considering equity release in Luton, then there are a number of different things to consider.
You should take into account the following factors when considering equity release in Luton so that you make the best decisions for you and your current situation and circumstance.
You should consider the following factors.
Finally, it is incredibly important to also understand that you will need to talk through your equity release plans before you make any final decisions.
You should always consult with your loved ones, family members and next of kin to make sure that they are happy with your decision, and you should also inform your chosen solicitor when you have done so.
This is an incredibly important step to take, as your equity release plans will affect your next of kin and family after you pass away or move into long-term care.
This is why it is good to make sure that everyone is happy with your decision.
Please call our 24-Hour Helpline: 0330 058 1579
It is important to understand that most equity release plans are only available to those aged over 55 years old. If you are close to being 55 years old, then you should wait until you reach 55 years old until you speak to an equity release advisor.
However, lots of people who are aged under 55 years old might still be in need of extra funds and cash as they enter retirement.
If this is you, then you should consider speaking to a mortgage broker about remortgaging your house, or you should speak to a financial advisor about what your options are instead of equity release.
Lots of people aged under 55 years old choose to re-mortgage their home as a way of lowering your monthly mortgage repayments.
Depending on your situation, you also might be able to raise more cash against your property and home.
However, more and more lenders are now increasing their age limit when it comes to re-mortgaging properties across Luton and the rest of the UK.
This is why it is incredibly important to check with a financial advisor about your options before assuming that you can release equity in your home or apply to remortgage your property.
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It is important to understand that there are costs associated with equity release in Luton. Whilst the money and equity release you receive will be tax-free, you will be expected to pay additional costs.
Whilst interest rates are only slightly more expensive than usual mortgage interest rates, they do add an additional amount to the cost of equity release plans.
It is also worth considering additional factors and costs such as solicitor’s fees and valuation fees. These are said to set you back anywhere between £1,500 and £3,000 depending on the type of equity release you opt for.
It is important to understand that valuations are a crucial stage of the equity release process, and will usually only cost between £100 and £200.
You will also have to pay for any legal work, including the cost of a surveyor which will usually cost anywhere between £1,000 and £3,000 depending on the level of the work required to get you and your family through the equity release process.
If you are considering equity release in Luton but are concerned or confused about the costs associated with equity release, then speak to a member of the Equity Release Warehouse for more advice and insight into how much equity release in Luton might cost for you.
You can learn more about the costs associated with equity release here.
Please call our 24-Hour Helpline: 0330 058 1579
As with most mortgages and loans, with equity release in Luton, you will have to pay interest rates on your loan. This will inevitably affect how much you are due to owing on your equity release plan.
However, unlike with a normal, traditional mortgage, the interest on an equity release loan is open-ended and will finish when you pass away or move into long-term care for health reasons.
It is also important to understand that interest rates on an equity release loan will be slightly higher than they would with a normal mortgage, which does mean that your interest and loan will increase quickly, quickly turning into compound interest.
This is why you are advised to pay off your interest on your equity release loan through monthly repayments, which will prevent the interest on your equity release loan building up over time.
However, you will never be forced into doing this, and the decision is inevitably your decision to make.
It is also worth considering that when an individual opts for a home reversion plan, if your property and home increase in value, then the chance that the mortgage provider owns will also increase.
If you are concerned about the interest rates when it comes to equity release in Luton, then speak to a member of the Equity Release Warehouse team for advice and support.
Please call our 24-Hour Helpline: 0330 058 1579
Professional and legal advice is absolutely necessary when it comes to choosing an equity release plan in Luton.
For many lenders, this part of the process is often mandatory, and lenders will make sure that you have gained advice and support from equity release specialists before making a final decision.
An equity release advisor will be able to advise you on the very best equity release plans for you, as well as talking you through the process from start to finish.
Any good equity release advisor will also ask you what exactly you plan on spending your equity release funds on, so that they can make sure you are making wise and sensible investments and purchases.
It is incredibly important to understand that an equity release specialist is not there to make a decision for you.
They are simply there to guide and support you and help you to make the best decision for you and your family.
A good equity release advisor will also highlight any other options that might be better suited and available to you. This could include re-mortgaging your property or applying for a bank loan.
Before helping you to make your financial decision, your equity release advisor will also help to draw up a full equity release mortgage illustration, which will set out the overall associated costs and fees when it comes to your chosen equity release plan, so that you have a full picture of what you are signing up to.
Your equity release advisor will also help your family to gain a better understanding on how equity release works, and how this might impact their life and their inheritance.
It cannot be stressed enough that being open and honest with your equity release advisor is incredibly important, as they will need a full and true picture of your financial situation, and what you plan on doing with your equity release money and funds.
It’s also possible that equity release might not be the most suitable option for you. You can assess the various drawbacks and alternatives of equity release here.
If you are releasing equity to combat the cost of living, then it might be better to first see if you can better manage your budget. Below, we list organisations that may be able to help in Luton:
Address: Community House, 15 New Bedford Rd., Luton LU1 1SA
Website: http://www.citizensadviceluton.org.uk/
Address: Landrace Rd, Luton LU4 0SW
Telephone: 01582 666877
Website: http://www.mmcu.co.uk/
You can also see help and advice from Luton Borough Council, and national organisations such as StepChange and the Money and Pensions Service.
Please call our 24-Hour Helpline: 0330 058 1579
If you are considering equity release in Luton but are struggling to know where to start, then you should speak to a member of our equity release team at Equity Release Warehouse.
Our fully qualified and professional team will be able to help and guide you on which equity release scheme will be best for you, considering the current market and equity release interest rates.
It is important to understand that once you speak with one of our equity release specialists, you are not obliged to go ahead with releasing equity from your home in Luton.
Our advisors and specialists are simply here to help to guide and support you on your decision, whilst providing you with all of the relevant information that you need to make an informed decision.
You can visit us online at www.equityreleasewarehouse.com to request a free brochure. Alternatively, you can call our team for free on 0330 058 1579 for professional advice and support.
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