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Lifetime Mortgage & General Equity Release Advice in Richmond upon Thames
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.
A home reversion plan is an equity release in Richmond upon Thames product that is available to people who would like to take out a loan secured against their valuable property in London.
To have a home reversion, you have to be prepared to sell your property. However, you will not have to move into a new property; you can stay in your current home with the equity release loan for the rest of your life.
When you want to go into long-term care (e.g., a care home), or when you pass away, the home reversion provider will put your property up for sale.
The money that is raised from this sale will go towards paying off your equity release in Richmond upon Thames loan, and any additional money can go to the people in your will.
A lifetime mortgage is a type of equity release Richmond upon Thames that allows people to access tax-free cash from their property without moving house or selling any part of their home.
Instead, they get an equity release loan to last them through retirement, and they are charged compound interest on this loan.
As time goes on, the interest adds up, and they eventually owe an amount of money that is equivalent to their property value.
This means that when the equity release in Richmond upon Thames provider sells the home, they can take an amount of money from the sale that reflects the size of the loan offered to the equity release consumer.
All advisors we work with are regulated by the Financial Conduct Authority and Financial Ombudsman Service. Advisors are able to recommend equity release products covering the entire market and allow you to lend from reputable lenders such as Scottish Widows, Legal & General, Aviva, Liverpool Victoria (LV), Canada Life, more2life and Hodge.
Retirement interest-only (RIO) mortgages are also secured against your home. They can be offered by equity release Richmond upon Thames providers or traditional mortgage providers.
Just like with equity release in Richmond upon Thames, there are no monthly repayments for customers with a RIO mortgage.
This makes the mortgage ideal for anyone who is struggling to fund their retirement, or who wants to spend their income on something other than expensive mortgage payments.
However, the main difference between a lifetime mortgage and a RIO mortgage is that interest payments are obligatory for the latter. Customers must pay off the interest on a monthly basis, so they do not end up owing compound interest.
Another key difference is that there are often affordability checks for RIO mortgages, whereas these checks are not always necessary for an equity release in Richmond upon Thames lifetime mortgages.
The reason your income and credit rating are considered for a RIO mortgage is that you need proof that you can afford monthly interest payments.
This is required for certain lifetime mortgages, such as the interest only plan, but customers with a low income or poor credit rating can enrol onto the majority of equity release plans easily.
The answer to this question depends on how you define ‘younger homeowner’ and ‘older homeowner’.
If ‘younger homeowner’ means someone in their 30s who is trying to get onto the property ladder, equity release is certainly not better for them. In fact, they would not be able to access the scheme at all, as they are below the minimum age of 55 years old.
If you are between 55-65, you could be considered a younger equity release consumer. Releasing equity at this age is a great idea, as it sets you up for retirement.
It could help you to avoid significant traditional debt, as you would take out the secured loan instead of spending years getting unsecured loans that you may struggle to pay back.
One negative of taking out equity at this age is that the compound interest payments will be much higher, as the interest will accumulate over a long period of time.
As a result, you would be in more debt, which could affect your ability to fund later life care costs, or your family’s entitlement to your money.
Yet, if you get a no negative equity guarantee in your equity release in Richmond upon Thames plan, high interest will not be a concern for you.
No matter how much interest you owe, the equity release lender will never take more money from your home sale than you originally borrowed.
The only problem would be that they would take the maximum amount of funds, and if you want to avoid this, you may choose to release equity later down the line.
It is also beneficial for older homeowners to get equity release in Richmond upon Thames. Not only will the overall debt be lower, but they could get a better deal from a lender due to their age.
They may be able to secure a lower interest rate, as product providers know that the property sale will most likely occur sooner than it would for a 55-year-old customer.
A downside to releasing equity in your 70s or 80s is that it can be harder to find an equity release product or a lender that offers loans to someone of your age.
Some people find themselves in this position, and wish that they had made the most of equity release in Richmond upon Thames at a younger age.
To conclude, there is no right age to release equity. There are pros and cons of equity release in Richmond upon Thames as a younger and older homeowner.
The majority of the time, the best time to release equity is right now. You will never have to repay your loan after a set period, so there is no reason to hold back for fear of being in debt.
Thanks to the many different protective measures we now have, you can release equity at a young age and still establish a comfortable financial situation for yourself and your family.
No negative equity guarantees and inheritance protection schemes ensure your loved ones can inherit your money, regardless of how much of your equity release loan is left when you die.
The amount of debt you will get into will vary according to how much money you release, which plan you choose, and which lender you go to for equity release in Richmond upon Thames.
There are many different types of equity release, and a range of options within these equity release schemes, so the debt is different for each customer.
If you figure out how much money you could take out of your property, it will give you an idea of how much debt you could end up being in. Use our equity release calculator to work this out, but keep in mind it is just an estimate.
After working out your equity release estimate, have a look at current interest rates with different equity release lenders. Currently, the overall average interest rate is 7.55% (1).
You can use this to judge how much interest you could owe by the end of the scheme.
All of these calculations are down to prediction, as you do not know how much interest you will be paying and how long you will be on the scheme for.
For this reason, we recommend meeting with a specialist equity release adviser who can give you an accurate calculation based on your individual circumstances.
We are happy to do this for you in our initial assessment. Once you have chosen your equity release plan and lender, it will be much easier for us to tell you how much debt you could be in by the end of the scheme.
Please remember that this is not the type of debt that can result in having your home taken away from you. Even if you never make a repayment on your equity release in Richmond upon Thames loan, you will keep your house, and your no negative equity guarantee will stand firm.
You can learn about the cost of equity release here. It may also be worth reading our guide to the alternatives to equity release.
If you are in debt, and want to arrange equity release to pay for that debt, then it might be more advisable to first seek out the help of a debt counselling professional.
Below, we list organisations offering this type of help in your local area:
Address: 94-102 High St, Hampton Hill, Hampton TW12 1NY
Phone: 0808 278 7873
Website: https://www.citizensadvicerichmond.org/
Address: Community Centre, THE WHITE HOUSE, 45 The Avenue, Hampton TW12 3RN
Phone: 020 8878 3073
Website: https://www.ageuk.org.uk/richmonduponthames/
Other organisations that may help include StepChange Debt Charity, Society of Later Life Advisers and Age UK.
It takes an average of eight weeks to do equity release in Richmond upon Thames. This is very quick compared to some other property schemes (e.g., downsizing), so it is ideal for people in a desperate financial situation, or people who need a lump sum of money.
Some people wait to release equity as they need to save the money to pay solicitors, advisers, and their lender. However, there is no reason to wait.
You can borrow money from your loan and get started with equity release in Richmond upon Thames immediately.
It all starts with the equity release application process, which can be filled out very quickly if you know what you’re doing. It is often much faster if you complete the application with an equity release specialist, as they offer an efficient service for a reasonable fee.
If you are planning on getting an application soon, it is a good idea to start preparing paperwork to speed up the process.
You will need to know the details of your traditional residential mortgage (if you still have one), the estimated value of your property, and your financial situation.
This does not mean that you will be penalised for having a low salary or a bad credit report. You will be accepted onto most plans despite meeting the aforementioned criteria, but you still need to make the lender aware of these things.
We can lead you to equity release in Richmond upon Thames swiftly, with our incredible expertise and our friendly yet professional service. Reach out to us on 0330 058 1579 to take the first step today.
Access help and advice today across Richmond upon Thames in Kingston, Kingston Upon Thames, Strawberry Hill, Twickenham and Whitton.
[1] Equity release interest rates, fees and costs https://www.telegraph.co.uk/financial-services/retirement-solutions/equity-release-service/equity-release-interest-rates/
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