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Lifetime Mortgage & General Equity Release Advice in Stoke-on-Trent
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.
There are many different reasons to consider equity release Stoke-on-Trent. Despite the many misconceptions that are out there about the equity release scheme, it is a great way to increase your retirement income without needing to have a large amount of money to begin with.
With a conventional loan, the lender is trusting you to repay the money based on your proven history of repayment, which is largely determined by your credit rating. However, with an equity release loan, the money is secured against your property.
This means that you will likely have access to a larger amount of funds, particularly if your property is highly valuable. If you are in need of money very quickly, or you need a regular boost to your income, the equity release scheme will meet your needs.
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As the equity release loan does not need to be repaid, you can spend the loan on whatever you would like without worrying about not being able to afford repayments. This makes a huge difference in terms of long-term income, as you can live as though you are not in debt.
What’s more, if you do not have a large income in general, with the equity release scheme, you can still make ends meet. On the other hand, traditional loans require consistent repayment, which not everyone can afford.
Not many people can afford to purchase a second home in retirement, but an equity release loan makes this possible. You could either get a buy-to-let plan or a second home plan if you would like to buy a second home with equity release in Stoke-on-Trent.
With a buy-to-let lifetime mortgage, you can buy a home to rent out to others. This could provide you with a consistent income for many years, so it is a desirable option for many homeowners in Stoke-on-Trent. However, it would require you to have a very valuable property otherwise your loan amount would not cover the purchase of the property.
A second home lifetime mortgage allows you to purchase a property that you can use either as a holiday home or an official second home.
This can make your retirement more interesting as it gives you two different places to stay. You could also use this as a reason to move closer to family, further into the countryside, or to a property that is easier to manage.
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We are not ignorant to the fact that there are disadvantages to equity release Stoke-on-Trent, and we are going to outline these for you. Remember that some of them are subjective, so what is a disadvantage to one homeowner may be an advantage to another.
With equity release in Stoke-on-Trent, the loan amount and the interest do not have to be repaid until the property is sold at the end of the scheme. This is generally an advantage, but it does mean that the interest will accrue over time and can reach a very high amount.
This means there will be less money left to pass on to the homeowner’s beneficiaries. This may be acceptable for people who are not interested in leaving a large inheritance, but many people are deterred by this as they want to make sure their family are taken care of.
If you do not meet the eligibility criteria for equity release Stoke-on-Trent, there is not much you can do. For example, if you are under 55 years old, you are not a homeowner, or your property is not worth £70 000 or more, you cannot take out equity in Stoke-on-Trent.
This is a downside when it comes to the accessibility of equity release in Stoke-on-Trent, as it means that there are many interested customers who cannot apply as they do not qualify for a loan.
Having said that, each lender’s criteria is different, so it is possible for a homeowner to be ineligible for one scheme yet eligible for another.
Do not rule out equity release if you don’t believe you qualify. It is best to seek free equity release advice to find out if there is anything you can do to improve your chances of getting a loan.
Please call our 24-Hour Helpline: 0330 058 1579
Some people love that equity release in Stoke-on-Trent is a lifelong commitment, as it means they can rely on a steady income for the rest of their life. However, others are hesitant to get involved in case their circumstances change and they realise they want to back out of equity release.
Though modern equity release plans are more flexible than ever, it is still not uncommon to have to pay an early repayment fee for exiting the scheme early, as the lender expects that the customer will stick with the scheme for the rest of their life.
What’s more, with certain equity release lenders and plans, you will be restricted in your decisions. For example, you may not be able to move home and you may not be able to rent out your home. This means you must be certain that you want to take out equity before you commit to it.
Also, 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 Stoke-on-Trent:
Address: 5 Cheapside, Hanley, Stoke-on-Trent ST1 1HL
Telephone: 0345 643 1553
Website: http://www.moneyline-uk.com/
Address: Advice House, 13-15 Cheapside, Hanley, Stoke-on-Trent ST1 1HL
Telephone: 0344 411 1444
Website: http://www.snscab.org.uk/
Address: 140 Broad St, Hanley, Stoke-on-Trent ST1 4HP
Telephone: 01782 219800
Website: https://www.unitetheunion.org/what-we-do/unite-in-your-region/west-midlands/contact-us/
Please call our 24-Hour Helpline: 0330 058 1579
The interest rate on equity release Stoke-on-Trent depends on the specific equity release plan you select. To find out more, get in touch and ask about a specific lifetime mortgage or home reversion.
The important thing to remember is that the interest will accrue with almost all equity release schemes. This will be the case unless you specifically select a plan that allows you to repay the interest, meaning it will not add up for the duration of the scheme.
For example, the interest-only lifetime mortgage encourages equity release consumers to pay back a portion of the interest each month, or sometimes all of the interest.
This is only suitable for people who can afford to do this, but if you can, it’s a great way to keep your debt in retirement as low as possible so more money can be passed onto your family when you pass away.
You will be pleased to know that all equity release funds are completely free of tax. This is applicable to both lifetime mortgages and home reversion plans.
If you leave some of your equity release funds to your loved ones, you have to consider inheritance tax liability. However, equity release funds are unlikely to be liable for inheritance tax.
This is because most equity release consumers do not leave enough money to reach the inheritance tax threshold.
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There are no rules when it comes to what you spend your equity release loan on. If you get in touch with us, we can give you some ideas of what you could spend your loan on based on the amount of money you could access from your home.
One very common way to spend an equity loan is to use it to pay off an existing mortgage (1). This is useful for people who are interested in equity release but are still paying towards their mortgage, as it means they don’t have to miss out on equity release.
Another popular option is to use an equity release loan to achieve financial security, by spending it on bills and debt repayments. This is becoming a more common choice as the cost of living is rising.
Some people spend their equity release funds on home improvements. This is a particularly good idea for homeowners in their later years, as they can make their home more disabled-friendly which makes for a more comfortable retirement.
It is also known for equity release consumers to use their equity loan to help out their family and friends who are struggling financially, whether it be to contribute to the bills, higher education, or an important life event such as a wedding.
Please call our 24-Hour Helpline: 0330 058 1579
Equity release is not the only way to boost your retirement income in Stoke-on-Trent. There are many other options that may be more suitable for you. Here are a few examples.
You could find a lower-value home to move into, which would reduce the amount you are spending on your mortgage, as well as potentially reduce the cost of your bills.
Some customers even choose to downsize and then release equity from the new home, but the home must meet the eligibility criteria of a lender for this to work.
Yet, this is only an attractive option for people willing to move home. If you are attached to your current property and do not want to leave it, equity release may be the best option as you will be able to live in the home for the rest of your life. What’s more, the initial fees for equity release are much lower than they are for downsizing (2).
An obvious option may be to resort to credit cards, as this would allow you to access the money you need on a short-term basis, preventing you from getting into as much debt as you would with equity release.
However, this would require you to be able to afford to make repayments, and the credit card company would have to approve your affordability before offering you money. This means this option is not viable for low-income families.
Though this is not a desirable option for most people, a simple way to boost your monthly income in retirement is to return to work.
This does not have to mean full-time work. You could get a part-time job or start your own business, which would allow you to be flexible with your hours.
It goes without saying that this is dependent on your age and your energy levels, as not everyone will be able to hold down a consistent job in their later years, so this is more of a last-resort option.
Some people are fortunate enough to be able to ask their loved ones to borrow money, and this can be enough to tide them over until they can eventually afford to repay it. However, this is only a possibility if you have someone in your life who would trust you to lend money, and if you know that you will be able to repay it.
Please call our 24-Hour Helpline: 0330 058 1579
Contact us to find out more about how equity release in Stoke-on-Trent works, and across Staffordshire.
We will delve into the details of the scheme, including the pros and cons, so that you can make an informed decision on whether equity release is right for you, and if so, which plan would be the most suitable for you.
In the meantime, please visit our blog to discover more about equity release. We answer important questions relating to topics such as inheritance, benefits, jargon, and remortgaging. We also have an excellent frequently asked questions page which covers various subjects relating to equity release.
If you still have questions about the scheme, the best thing to do is book an initial free consultation with us. We would be more than happy to talk you through applying for equity release in a safe way and to answer your burning questions.
Perhaps you are still undecided, and this is completely understandable. In this situation, we would advise you to continue to research the scheme, including the different plans that are available in Stoke-on-Trent.
You could also use your free consultation to ask us more about equity release and bring up any concerns you have relating to the scheme, as we will be able to answer honestly and guide you to a sensible decision.
All advisors we work with are regulated by the Financial Conduct Authority and members of the Equity Release Council. This means you are covered under the Financial Services Compensation Scheme, and you lodge a complaint with the Financial Ombudsman Service (FOS) if you are unhappy about the advice you receive in relation to equity release.
If you are unhappy about the legal advice you receive in relation to equity release, you can lodge a complaint with the Legal Ombudsman.
Please call our 24-Hour Helpline: 0330 058 1579
[1] Most equity release customers use product to clear existing mortgage – Canada Life https://www.mortgagesolutions.co.uk/news/2022/08/11/most-equity-release-customers-use-product-to-clear-existing-mortgage-canada-life/
[2] Downsizing or equity release: which is best? https://moneyweek.com/personal-finance/605317/downsizing-or-equity-release-which-is-best
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