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Lifetime Mortgages, Home Reversion, and General Equity Release Advice in Sheffield.
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.
If you have researched our organisation and discovered the work we do all over the UK (and abroad) to advise people on equity release, you will be pleased to find out that we also offer advice on equity release Sheffield.
The basic options for equity release are the same in Sheffield. You can either take out a lifetime mortgage or have a home reversion.
However, the mortgage lenders may differ in their criteria, so this means you should call us for information that is specific to Sheffield and to your individual circumstances.
Please call our 24-Hour Helpline: 0330 058 1579
There is plenty of miscommunication surrounding equity release Sheffield, and this is in part what makes so many homeowners hesitant to consider taking out equity in Sheffield.
Though more people are using equity release products, with a 4% increase between 2020-2021, some people believe Sheffield is not the right area to do this as the housing is comparatively cheaper than many other areas of the UK (1).
However, equity release can benefit homeowners anywhere, as long as their property meets the lender’s criteria. Property is becoming more expensive in general, so there are many pensioners in Sheffield who own valuable houses that they could release funds from.
Another reason people refrain from releasing equity is that they are overwhelmed by the application process. They believe it takes too long and is mentally draining as there are so many different options to choose from.
However, if you enlist the help of a financial adviser and an equity release specialist, you could complete the application in no time and receive your loan in a matter of weeks. You will be guided on each and every decision you need to make, so it won’t be anywhere near as overwhelming as it could be without an adviser.
Some people would rather rely on what they have earnt and do everything they can to avoid taking out a loan. They feel pressured to pay back any loan they take out, even if they are not expected to do so (as is the case with equity release in Sheffield).
Though loans would perhaps not need to exist in an ideal world, the fact is that many people are struggling to manage financially in their later years, and it is better to take out a loan than to go without the essentials such as food and heating.
What’s more, it is possible to repay an equity release loan, so there is no need to bow out of equity release in Sheffield simply because you would rather pay back increments. Financial Ombudsman Service
With a voluntary repayment lifetime mortgage, an interest-only lifetime mortgage or a retirement interest-only mortgage, you could begin to repay either the interest or the loan and reduce the overall amount you owe.
All lenders and advisors are related by the Financial Conduct Authority and all are members of the Equity Release Council. All of your rights are reserved, and you are entitled to complain to the Financial Ombudsman Service if you are unhappy about the advice you received when taking out equity release.
Please call our 24-Hour Helpline: 0330 058 1579
Equity loans can be used on anything you want to spend your money on, so there is no requirement to put your loan towards something practical and sensible.
Some people simply want to live it up in retirement and they have no beneficiaries to pass their inheritance to, so they spend their loan on holidays, days out, new cars, and home renovations.
However, it goes without saying that you should carefully consider what you spend your loan on as it is never a wise idea to lend money for something trivial, particularly if you do want to leave an inheritance.
If you are interested on spending your loan on a new property in Sheffield, either to rent it out or to use as a second home, you can request a specific equity release plan for this and you will have to spend your money on the new property.
On the other hand, if you are unsure what to spend your money on but you would like to use it to improve your standard of living in retirement, we have some suggestions for you. You could use it to pay off any traditional loans you have (including an existing mortgage), to put towards home improvements, or to pay your bills each month.
Again, there is no obligation to spend your loan on a specific thing (unless you go for a purpose-driven plan), so we cannot tell you to refrain from spending your loan on something that you want.
We would advise that you put your loan towards something that will benefit you in the long run, as you do not want to end up regretting what you have spent it on, and being in an unstable financial position once more.
Having said that, some people choose to use their loan to help their loved ones, and we cannot deny that this is an excellent cause.
Many young people are struggling to pay for a deposit on a home or to pay rent each month, and when an older family member takes out equity, it can help them to meet important milestones.
Please call our 24-Hour Helpline: 0330 058 1579
Yes, it is possible to take out a lifetime mortgage in Sheffield in just your name, excluding your partner. Most people prefer to have a joint mortgage as they share their money and they want the house sale to go smoother when they pass away.
However, there are valid reasons for taking out an individual loan. For example, your partner may be under 55 years old and therefore ineligible for a loan, and you don’t want that to prevent you from releasing equity.
Yes, there is a type of equity release known as a home reversion, and it does not require you to take out a mortgage. Instead, an equity release provider would purchase a portion of your home for less than the home’s market value (2).
With this method, monthly payments are not an option as you will always receive the cash all in one go, which is known as a lump sum. This means if you want to spend the loan on monthly expenses such as bills, you would have to save it up rather than spending it all at once.
At the end of a home reversion in Sheffield, as the equity release provider has a right to the property, they will ask the homeowner’s family to move their possessions out of the home so that it can be sold. Usually, this must be done within a week.
It goes without saying that this can be very stressful for the grieving family, so this is something to consider before you opt for a home reversion, as the sale for a lifetime mortgage is a slower process.
Please call our 24-Hour Helpline: 0330 058 1579
With a lifetime mortgage, you remain the owner of your home throughout the scheme. However, with a home reversion, part of the deal is that you give up your title of homeowner, yet you are expected to stay in the house until you pass away or go into long-term care.
If this is something that bothers you, you may want to consider a lifetime mortgage instead.
Sometimes, your mortgage lender will ask for your credit rating, and they will require you to have a certain rating in order to be considered for an equity release plan.
However, most lenders in Sheffield do not request this, and most plans do not require you to have a good credit history. This means equity release can be a great opportunity for people who have made financial mistakes in the past but are ready for a fresh start in their later years.
If you are set on enrolling on a plan that performs credit checks and your credit rating is currently poor, we encourage you to contact a financial adviser to help you improve your credit rating, as you may be able to make small changes to become eligible for your desired plan.
If you are claiming benefits and you would like to take out an equity loan secured against your property, you will first have to check whether releasing equity would impact your entitlement to benefits. This is dependent on the plan you are interested in and the lender you would be borrowing from.
Sometimes it is more beneficial to continue to receive benefits as they can be essential for people in retirement. However, other times, you will be in a better position if you take out equity and stop claiming benefits. A professional adviser can help you figure this out.
If the amount of equity release money that becomes available means you are no longer entities to benefits, the onus will be on you to inform the Department for Work and Pensions of that fact, and you could receive a penalty if you fail to do so.
Please call our 24-Hour Helpline: 0330 058 1579
Equity release can impact your pension or pension credits in a few ways. Pension credits are means-tested, similar to housing benefit or council tax reduction.
Releasing equity may affect your eligibility, as you will know have more cash at hand, and you, therefore, may need to inform the Department of Work & Pensions of this fact. This additional money from equity release will be taken into account when determining your entitlement to credits.
Equity release itself won’t affect your State Pension payments. This is because State Pension is based on your National Insurance contributions.
The general rule is that nobody pays back their equity release loan in Sheffield directly. Instead, when they die or move into care, their property is sold and the money raised from this covers the cost of their loan.
If it does not cover the cost, a no negative equity guarantee will ensure the homeowner’s family is not paying back more than the borrowed amount.
If you would like to repay your loan early, you should select a scheme that permits this, such as the voluntary repayment lifetime mortgage. This allows you to pay back some money as and when you want to, so you do not have to leave your family with the full loan amount at the end of the scheme.
The interest-only scheme allows you to pay back a portion of the interest, or sometimes all of it, each month. This prevents the interest from adding up over time and amounting to another large sum.
Yes, depending on the country you live in, you could take out equity abroad. Though this article is based on Sheffield, we are happy to help people in all different areas to pursue equity release. Contact us to find out whether we work in your local area.
Something else you can do is release equity to purchase a holiday home in another country, provided that you are prepared to live there for at least six months of the year. You can do this with a second home/holiday home lifetime mortgage.
Please call our 24-Hour Helpline: 0330 058 1579
We do not like to recommend plans until we get to know your personal situation, so for a specialist recommendation, call us and we will arrange a free consultation with you, including a discussion of the plan we think is best for you and your family.
Some plans will very obviously not be designed for you, and you don’t need an adviser to tell you that, so make sure you have a look at our plans page to get a vague idea. For example, you will not be suitable for an ill health arrangement if your health is great.
Below, we attempt to answer some of the questions you may have around the topic of equity release in Sheffield:
There are various costs involved with releasing equity in Sheffield, such as the application fee, valuation costs, solicitor’s fees, and advice fees. The amount you pay will depend on the decisions you make along the way.
For example, selecting a highly prestigious solicitor’s firm is evidently going to cost more than going with a local budget-friendly solicitor’s.
Seeking advice from a firm that charges customers will be more expensive than going to a charity that offers free guidance.
This means you can intentionally avoid spending a huge amount on equity release, but whatever you do, there will be costs that are unavoidable. Sometimes, you can request that you pay these costs through your loan, so the money will be deducted from the loan before you receive it.
You could borrow up to 60% of the value of your home, but this is dependent on many factors so not everyone is entitled to this amount (3). Most people will borrow between 20-60% of the value of their Sheffield property.
To discover how much you could release, request a quote from us or make the most of our equity release calculator.
Yes, some homeowners choose to downsize before taking out equity as this leaves them with even more money to work with. This is a particularly good idea if you feel as though your home is too large for you and you would like to manage a smaller home now that you are retired.
Others choose to downsize and never pursue equity release, as they realise that paying less on their mortgage allows them to enjoy their retirement without needing to take out a loan.
No, unfortunately, under-55s cannot release equity in Sheffield as the scheme is only available for people aged 55 and over. However, you can register your interest in equity release with us and we will help you to learn all you can about it before you are able to pursue it at a later date.
For a home reversion, you must be 65 years old, though some lenders will accept you at a younger age.
The interest rates vary from plan to plan, so there is no set interest rate for equity release. Some plans offer fixed interest rates, some offer variable, some have higher interest rates, and some have lower. You will find out about the specifics of this when you speak to an equity release adviser.
If you would like to avoid high-interest rates, mention this to your adviser and they will select a plan with low-interest rates, such as a lump sum plan or a voluntary repayment scheme.
Yes, your property will have to fit the lender’s criteria, and this is one of the purposes of a valuation. Your property must be worth £70,000 or more, and this rule is consistent across the board with lenders and schemes.
Some lenders are more picky with their criteria, so they may only want homes in specific areas, or with a certain amount of rooms.
If this is the case, you will be informed of this during your application process so you will have enough time to seek out another lender if your property is not suitable.
If you choose to move home during the equity release scheme, the new home must also fit the lender’s criteria, so take note of this as you will not be able to move wherever you want to.
The answer to this question is a resounding yes. Equity release is not the cheapest way to borrow, and it does come with some potential drawbacks. You can read about the alternatives to equity release here.
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 Sheffield:
Address: 35 Townhead St, Sheffield City Centre, Sheffield S1 2EB
Telephone: 0114 276 0787
Website: http://sheffieldcreditunion.com/
Address: 416-418 London Rd, Lowfield, Sheffield S2 4ND
Telephone: 0808 278 7820
Website: http://www.citizensadvicesheffield.org.uk/
Address: 416-418 London Rd, Lowfield, Sheffield S2 4ND
Telephone: 0808 278 7820
Website: https://citizensadvicesheffield.org.uk/
Address: The Circle, 33 Rockingham Ln, Sheffield City Centre, Sheffield S1 4FW
Telephone: 03444 113 111
Website: https://citizensadvicesheffield.org.uk/
Please call our 24-Hour Helpline: 0330 058 1579
We hope that you are more informed about what equity release in Sheffield looks like and whether you could be an equity release consumer.
For information about equity release in areas other than Sheffield, see our location pages. Remember that we do not have a page for every location, so please contact us if you want to know whether we can help in your area.
Finally, if you are particularly concerned about equity release, we want to ease your worries by providing you with unbiased information.
We do not mind if you decide equity release is not right for you, but we would like to give you the opportunity to consider it as we know that many homeowners are misled by unhelpful myths.
If you have any further questions, get in touch on 0330 058 1579 and our advisers will happily answer those for you. Our freeline is open every day from 8am to 8pm.
Access help and advice today across Sheffield in Neepsend, Grimesthorpe, Attercliffe, Heeley, Darnall, Hillsborough, Wadsley, Nether Edge and Longley & Carbrook and Rotherham.
[1] Uncover the Record Breaking Equity Release Market Statistics in 2022 https://www.mpamag.com/uk/mortgage-types/equity-release/equity-release-market-continues-growth-in-2022-erc/434638#:~:text=Despite%20a%20slowdown%20in%20the,wealth%20via%20equity%20release%20products.
[2] Home reversion plans explained https://www.legalandgeneral.com/retirement/rewirement/home-reversion-plans/
[3] What Percentage Can You Borrow on Equity Release? https://www.ftadviser.com/mortgages/2022/11/11/equity-release-interest-drops-off-cliff-in-face-of-8-rates/
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