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Lifetime Mortgage & General Equity Release Advice in Maidstone
Reviewed by Tom Philips
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Equity release Maidstone is becoming an increasingly popular way of accessing the cash that is tied up in your home. People are using equity release in Maidstone as a way to get cash out of their homes, without having to sell their property first – this can be in the hundreds of thousands in some cases.
Whether getting an equity release is the right decision for you will likely depend on your financial standing, age, house value and how much of your mortgage is outstanding.
If you would like to learn more about equity release in Maidstone, and if it is the right choice for you, then speak with a member of the Equity Release Warehouse team for advice and support.
Please call our 24-Hour Helpline: 0330 058 1579
Equity release is a term used to describe a number of methods that can be used to help you access the equity (also known as ‘cash’) that is currently tied up in your property.
If you have a mortgage on your property in Maidstone, then the equity within your home is the total value of your home minus the outstanding mortgage amount.
For example, if your house is worth £250,000, and you have £100,000 left to pay on your mortgage, then the amount of equity you have is £150,000.
Equity release Maidstone can then be viewed as a way that you can transfer the equity in your home into cash in your bank account. Using the example above, equity release would be able to transfer a proportion of the £150,000 into your bank account, to be used however you like.
It is important to think about why you would like the cash from your equity release scheme when deciding if equity release in Maidstone is right for you.
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It is important to consider the different equity release methods available to you in Maidstone. Factors such as your age, if you would like to leave an inheritance and your financial situation will determine which avenue is best for you to follow.
There are two main equity release options available to you in Maidstone: a lifetime mortgage and a home revision plan. If you have never explored equity release before then you will probably have never heard of these before.
Below are the key points to consider for each approach before you have a discussion with an equity release specialist.
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Taking out a lifetime mortgage as an equity release option is one of the most popular methods within Maidstone.
One of the biggest attractions to a lifetime mortgage is that you do not make any repayments on the equity loan whilst you are alive; and you can take out this kind of equity loan as early as 55 years old.
The way that a lifetime mortgage in Maidstone works is that the equity that is borrowed is secured against the equity within your home.
This can be a certain percentage of the available in your equity, typically 20-50%, and the loan does not have to be paid back until the final borrower either dies or goes into a full-time care facility.
The equity loan is eventually paid back through the sale of the property that the loan was secured against.
A positive of this option is that you will retain homeownership of the property and continue to live in it as normal. Therefore, the equity that is released can be used for home renovation works to further increase the overall value of your property in Maidstone.
Interest will be charged on top of the equity loan amount and this will compound in interest until the loan is paid back upon either death or entering full-time residential care.
Compound interest will exponentially grow on top of the equity loan amount, so the amount that is owed to the equity release provider may be significantly more than the actual equity amount.
This can be a scary thought if you were hoping to leave an inheritance from the house sale to your children.
Fortunately, many lifetime mortgages come with a ‘no negative equity’ guarantee – meaning that you or your beneficiaries will not have to pay back more than the value of your home.
Depending on your circumstances you will typically choose between an interest roll-up lifetime mortgage or an interest-paying lifetime mortgage.
An interest-roll-up lifetime mortgage means that you will not be required to pay any regular payments on the mortgage, and the total loan amount, plus interest, will be paid upon the sale of your home.
On the other hand, an interest-paying lifetime mortgage allows you to pay off some of the equity loan interest, which will help reduce the total amount owed when your home is sold.
Both of these mortgage offers in Maidstone can be as a lump sum or a regular income.
Which one you decide is based on your financial circumstances and what your plans for the equity are. An equity release specialist in Maidstone will be able to help you decide which one is most appropriate for you.
Some key things to consider with an equity release advisor when discussing lifetime mortgages:
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Under a home reversion plan in Maidstone, you will sell either all or part of your home to a company that will in return release an agreed amount of equity that you have in the property.
You will be allowed to carry on living in your home until you die or move away, but you may need to pay an agreed amount of rent.
Home revision plans are only available to people 60+ with many providers in Maidstone only offering the plans to people over 65. The older you are when you take out the revision plan, then the larger the percentage of equity you will usually be allowed to release from your home.
Home revision plans can appear to be more appealing than a lifetime mortgage as you are not charged any interest on the equity amount that has been released.
This means that you will not need to worry about the effects of compounding interest when you eventually sell the property.
Even though you no longer own your home outright, most lenders tend not to charge rent in exchange for owning part or all of your home. Instead, it will be your responsibility to maintain the property and you may need to pay ground rent – but this will be set out in the terms of the lease.
Like a lifetime mortgage, you can take out the equity as either a lump-sum or regular payments that are drawn down from the total amount. Speak to an equity release specialist for more advice on which option is best for you.
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Equity release in Maidstone can vary depending on your age and how much of your mortgage you have left to pay.
The typical amount of equity released from people’s homes is between 20-50% – but this is even higher if you are over 65 and have more valuable property.
Age is one of the most important factors for equity release in Maidstone providers when reviewing your application. Typically, the longer you have left until your expected life expectancy, the less equity you are able to release.
Even if you are 55 years old in Maidstone, in good health and have 30 years of life expectancy left, most equity release lenders will still release well over 10% of your home’s equity.
Whether you receive 15% or 80% of equity release, one of the biggest benefits to the method is that you will receive your cash tax-free. This remains the case whether you take it as a lump-sum or decide to draw down small amounts on a monthly basis.
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Essentially, equity release in Maidstone is a way for a homeowner to get access to a significant amount of cash without having to downsize their property or enter into an unsecured loan with a bank or building society.
Entering into an equity release agreement can involve very large sums of money and should not be entered into without first thinking about what your plans are for the cash that you are looking to receive. If you are considering equity release in Maidstone then you should consider the associated costs.
A popular reason for equity release in Maidstone is to release equity from your home to help with the associated costs of a home improvement or house renovation project.
As home renovations typically go towards increasing the overall value of the home’s market value, this is seen as a sensible way of using your funds.
You might choose to build an extension, reconfigure the inside layout or simply make some modifications to your home.
Similarly, people in Maidstone choose to use their funds to adapt their homes to meet their ageing needs, such as installing special equipment or reconfiguring the floor plan to make it easier to move around as you enter later life.
Unfortunately, you may require private carers to help you with your day-to-day living, which you can’t fund through your equity release funds.
Caring costs can be incredibly expensive and an equity release in Maidstone can be an attractive way of funding the care costs without having to pay any additional costs whilst you are alive.
If you are fortunate to be in good health and don’t have any grand plans for a home renovation, then you could simply use your equity release to provide financial assistance to your family.
This could be to help pay for your family members’ education, support them onto the property ladder themselves, or just organise a well-needed family vacation.
If you are considering equity release in Maidstone, then you might benefit from having a plan in mind for what you would like to do with your equity.
You can speak to an equity release advisor from Equity Release Warehouse for more information on the type of equity release that would be most suitable for what you plan to spend your money on.
Please call our 24-Hour Helpline: 0330 058 1579
It is important to understand that equity release schemes are a heavily regulated field in the UK and the professional standards that equity release providers need to adhere to to remain practising.
There are two main regulatory agencies within the UK that your equity release provider should adhere to: the Financial Conduct Authority (FCA) and the Equity Release Council (ERC).
Both of these agencies provide a framework of regulations for providers to follow. For example, the ERC will ensure that all lenders offer a no negative equity guarantee with their equity release packages.
To maximise your level of confidence in the safety of your equity release in Maidstone, you should ask your equity release specialist if a provider is acting in line with the FCA and ERC.
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Equity release in Maidstone is one way to gain immediate access to a large proportion of your overall asset’s value.
Using equity release to achieve this offers the huge benefit of it being tax-free. All the money that you will receive from the equity amount will be the exact same amount that you are offered – no deductions.
If you decide to choose an option like the lifetime mortgage, then that means you won’t have to pay a penny back until you either die or enter a care facility. This can offer a huge piece of mind if you are worried about how to finance upcoming life plans.
An equity release cash injection means that you can avoid having to compromise on your lifestyle as you enter into your later life.
Many people who are thinking of winding down have to downsize on their property to release needed funds. With an equity release, you can remain in your home whilst also enjoying the fruits of your fortune.
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It is important to note that there can be some drawbacks to equity release in Maidstone, under certain circumstances. You should know these in advance of entering into an equity release plan or ask your equity release specialist to go into more detail on them, so that you have the full picture.
Certain equity release plans in Maidstone can have a huge impact on the amount of inheritance that is left for your family.
For example, the compounded interest that is accumulated on a lifetime mortgage may equal the total amount of your home’s value when you pass away. If this is the case, your equity loan will be settled but your family will not receive any funds from the house sale.
You may be restricted to living in your house until you either die or move into full-time care under most equity release schemes in Maidstone. This can be a drawback if you have any future plans to move away in your retirement or relocate to be closer to family.
Even though you do not pay tax on any equity release plans in Maidstone, there are costs which may in total outstrip the benefit of receiving a tax-free sum.
As discussed, the interest that can accumulate on an interest roll-up mortgage can eat into the remaining value of your property on the point of sale.
Plus, the upfront costs of your equity release application can come to a sizable amount – such as the financial advisor fees, which can come to 2% of the overall equity release loan.
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 Maidstone:
Address: 2 Bower Ter, Tonbridge Rd, Maidstone ME16 8RY
Telephone: 0808 250 5704
Website: http://www.maidstonecab.org.uk/
Address: 11 Gabriel’s Hill, Maidstone ME15 6HL
Telephone: 01622 754803
Website: https://www.ageuk.org.uk/
Address: Loose, Maidstone ME15 0AL
Telephone: 01622 753618
Website: https://www.ageuk.org.uk/maidstone/
You can also read our guide to the alternatives to equity release here.
Please call our 24-Hour Helpline: 0330 058 1579
You might have read this article so far and decided that equity release in Maidstone is something that you would like to explore further.
If this is the case, answer the following questions below to get an idea for if you would qualify for equity release in Maidstone.
Are you over 55 years old? You need to be at least 55 years old to apply for equity release in Maidstone. Many providers will only accept applicants who are 60 years older, or even 65 years old. The older you are, the more likely you are to be accepted; and the larger your equity amount will be.
Do you own your own home? It probably goes without saying, but you need to own a property to qualify for equity release in Maidstone.
In Maidstone, 87% of the homes are under private ownership[1], which means there is a high chance that you will be able to qualify if you are one of them.
Is your home worth at least £70,000? Maidstone consistently appears as one of the more affluent areas for house prices in both Kent and the UK [2] so you will most likely have a house that is worth £70,000.
It is worth noting that even though there is a minimum requirement for house value, there is no maximum.
How much equity do you have in your home? You do not need to be mortgage free in order to qualify for equity release in Maidstone, but you do need to have a certain amount of equity available in the property.
Most equity release providers have a minimum limit of £10,000, whereas others set the minimum at £100,000. It is important that you know what the minimum is when you talk to providers in Maidstone.
Please call our 24-Hour Helpline: 0330 058 1579
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