Equity Release Newport - Lifetime Mortgage Near Me

Lifetime Mortgage & General Equity Release Advice in Barnet
Reviewed by Tom Philips

Request A Callback

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.

Equity Release in Newport

Equity release in Newport is a popular way of gaining access to more cash later in life. Most homeowners aged 55 or over, or nearing retirement age are often cash-rich but asset poor.

This means that there’s an awful lot of equity tied up inside their homes, but not much day-to-day cash to spend. In fact, more pensioners than ever are feeling the pinch.

This is where equity release in Newport comes in. Equity release in Newport allows anyone over the age of 55 years old the opportunity to release equity from their home, without having to sell up or downsize.

You release a certain amount of equity from your home, depending on your age, your health and the value of your home. As with any form of mortgage, this will be expressed in a loan-to-value ratio [1].

So, what’s the catch? The great thing about equity release is that you do not need to repay the loan until after you pass away or move into care.

When either of these two things happen, your home will be sold. The proceeds from the sale of the home will pay off the loan in full.

It’s important not to forget that you will be charged interest on your loan. This will continue for as long as you live, or until you move into a care home.

So, you will build up quite a bit of compound interest which will be included in the final loan amount.

So, the proceeds from the sale of your home will need to pay off the initial loan amount as well as any compound interest [1].

However, interest rates with equity release loans are always fixed. The Financial Conduct Authority and Equity Release Council (the regulatory bodies) ensure that this is a standard feature across all equity release loans.

This means that before even taking out your loan, you will get to see exactly how much you will owe each year of your mortgage.

As you can imagine, the longer you live the more you will owe. This is where the no negative equity guarantee comes in [1].

What is the no negative equity guarantee?

The no negative equity guarantee is a standard feature across all equity release loans.

This guarantee ensures that even if your compound interest mounts up and exceeds the value of your loan, then the lender will step in to pay off the shortfall.

This means that your family or next of kin(s) will never find themselves responsible for paying off the shortfall in the amount you owe [2].

1. Lifetime mortgages

Lifetime mortgages are the most popular type of equity release in Newport. With equity release loans, you get to release a significant amount of money from your home without having to sell up or sell a percentage of your property to the lender.

You will never be asked to move home or sell up and are able to remain living in your home for as long as you want [3].

With lifetime mortgages, you will be charged interest which will turn into compound interest. This will also need to be repaid once you pass away or move into care, on top of the original loan amount [3].

In order to qualify for a lifetime mortgage, you must be aged at least 55 years old, own your own property in the UK worth at least £70,000 and apply for equity release in Newport through a qualified equity release adviser.

2. Home reversion plans

Home reversion plans work differently to lifetime mortgages. With home reversion plans, you have to sell a percentage of your home to the lender before gaining access to the equity release cash.

You will be selling a percentage of your home to the lender for less than market value, but will get to remain living in your home and will be free to spend your money on whatever you want [4].

In order to qualify for a home reversion plan, you have to be aged at least 65 years old, own your own home worth at least £70,000 and apply for equity release in Newport through a qualified equity release adviser.

Why do people consider equity release in Newport?

People consider equity release in Newport for a whole host of reasons. The main reason why people release money from their home in Newport is to gain access to more cash later in life.

This cash can be spent on a long list of things, including home improvements, a nice holiday, a new car or simply a better lifestyle. This could include joining a health club or being able to eat out more or enjoy more trips away.

Others might choose to spend their equity release funds on helping their loved ones, possibly grandchildren with the cost of further education by paying off their student loan or by helping them get on the property ladder.

If you are planning on gifting your money to your loved ones, then you will need to make your equity release adviser aware of your plan to do so.

The costs of equity release in Newport

If you are considering equity release in Newport, then it is important to consider the costs. With equity release in Newport, there are a number of set up costs.

This will include things such as the cost of an equity release specialist adviser, an equity release solicitor and the cost of an initial home valuation to determine how much your home is worth.

Some of these set up costs will need to be repaid before you gain access to your equity release funds, whereas some can wait to be repaid after you receive your funds.

Don’t forget, your equity release lender will also charge you interest on your loan, which will be added to the final loan amount.

The cost of an equity release solicitor varies, although usually sits at between £1,000 and £3,000.

The cost of an equity release adviser is usually payable after you receive the loan amount, or will be sorted by the lender.

A home valuation will need to be carried out prior to receiving your funds, which usually costs around £100.

Qualification criteria for equity release in Newport

The qualification criteria for equity release in Newport varies depending on which lender you opt for. This will also differ depending on which type of loan you opt for.

To qualify for a lifetime mortgage, you need to be aged at least 55 years old, own a property in the UK worth at least £70,000 (which also needs to be your main residence) and have already repaid your pre-existing mortgage.

For a home reversion plan, you need to be aged 65 or over in order to apply. Again, you must own a property in the UK worth at least £70,000 (which also needs to be your main residence) and have already repaid at least the majority of your pre-existing mortgage.

With both types of equity release loans, once you receive your funds then you must use these funds to repay any pre-existing mortgage that might be left.

You will also need to have a home valuation carried out and declare any debt you might have.

Advantages of equity release in Newport

There are numerous advantages to taking out equity release in Newport. These advantages are listed below [5].

You gain access to a tax-free lump sum (or drawdown plan) which you are free to spend on whatever you want, as long as you stick to the terms and conditions of your loan
You will never be asked to sell up or move out
You don’t have to repay the loan until after you pass away or move into a care home
Interest rates on all equity release loans will be fixed
If your home decreases in value or no longer covers the loan amount, then your family will be protected by the no negative equity guarantee
Your adviser will be able to give you an estimate on how much you will be able to release via their equity release calculator
You can protect yourself with downsize protection and inheritance protection
The equity release industry is now heavily regulated and standardised by the Financial Conduct Authority and Equity Release Council

Disadvantages of equity release in Newport

If you are considering taking out equity release in Newport, then you need to seriously consider the disadvantages of equity release as well as the advantages [5].

At Equity Release Warehouse, we truly believe that equity release is a great option for a lot of people, although we accept that it is simply not for everyone.

Below are a few things to think about before taking out equity release in Newport:

There are a number of set-up costs associated to equity release in Newport
You will be charged interest on your equity release loan
Your interest will turn into compound interest and will continue to grow for as long as you live or until you move into a care home
With home reversion plans, you will need to a sell a percentage of your home to gain access to your cash which will be sold for less than the market value
You might not be accepted for an equity release loan if you suffer from any debt