Equity Release Telford - Lifetime Mortgage Near Me

Equity Release in Telford

Equity release in Telford is a later-life mortgage which allows individuals who qualify over the age of 55 years old the chance to release equity from their home without having to sell up or downsize [1].

Are you aged 55 or over and are in need of some extra cash, but simply don’t want to sell your home? This is where equity release in Telford comes in.

Many pensioners and homeowners over the age of 55 years old simply don’t want the stress and hassle of having to move home. Not only is moving home expensive, but it’s also a lot of stress.

Equity release in Telford allows homeowners the chance to spend their equity on whatever they’d like, including home improvements.

The best thing about equity release in Telford is that you do not have to make any mandatory monthly repayments.

You simply repay the loan from the proceeds from the sale of your home after you pass away or move into a care home.

Whilst there are no mandatory mortgage repayments, you will be charged interest on your loan which will grow over the years into compound interest.

Although your interest rates are always fixed with equity release loans, your loan will continue until you either pass away or move into care.

So, the amount of compound interest you are charged will be significant [1].

How can equity release in Telford help you?

Equity release in Telford has helped hundreds of thousands of people up and down the country get access to the equity that is currently locked in their own home.

Equity release in Telford can help you in a number of different ways.

Firstly, if you still have a pre-existing mortgage then you will be able to pay the remainder of this off with the equity release funds that you receive.

This means that you will no longer have monthly mortgage repayments to make and will free up some extra cash for you to spend going into retirement.

Paying off your mortgage will be a huge relief, and you might even have some extra equity left over to spend on whatever you want.

Lots of people release equity from their home in order to improve their lifestyle going into retirement.

However, others choose to spend their equity release funds on home improvements, which is a very wise way to increase the value of your home.

Not only would a new kitchen be nice, but it should also increase the amount your home will be sold for, ensuring that the loan is paid off in full and that you don’t find yourself in negative equity.

Although, you are always protected by the no negative equity guarantee.

Some people use equity release in Telford to make their home more suitable for them as they age.

Afterall, equity release plans are designed to last for as long as you live, so you are most likely planning on remaining living in your home until you pass away or move into a care home.

So, you could spend your equity release money on a downstairs wet room, hand railings, a stair lift or simply making your garden more accessible.

Finally, others choose to spend their funds on helping loved ones.

With equity release in Telford you are able to spend your money on your grandchildren’s University fees, or help them to put down a deposit on a house.

How do I qualify for equity release in Telford?

In order to qualify for equity release in Telford, you must first speak to a qualified equity release specialist adviser.

They will be able to talk you through the ins and outs of equity release in Telford and will advise you on each step.

They will then work out how much money you might be able to release using their equity release calculator and help you to apply to the lender if it’s something you want to go ahead with.

In order to qualify for the most popular type of equity release in Telford, a lifetime mortgage, then you must be aged at least 55 years old and own your own property in the UK worth at least £70,000.

This property must be made out of traditional materials, must be your main residence and can be either a freehold or a leasehold [2].

In order to qualify for a home reversion plan, you must be aged at least 65 years old, on your own property in the UK worth at least £70,000 and this property must be your main residence.

As with lifetime mortgages, this property must be made out of traditional materials [2].

With both types of equity release in Telford, you must have already paid off a significant amount of your pre-existing, traditional mortgage in order to apply.

If you have any amount left on your pre-existing mortgage then you will be expected to pay this off by using the funds you receive from your equity release plan.

Please note, if you suffer from debt or have done so in the past then you must declare this to your equity release adviser as soon as possible in the process.

This might have an impact on whether or not you qualify for equity release in Telford.

Will equity release help me with an inheritance tax problem?

In some cases, yes. Depending on your personal circumstances, releasing equity from your home might enable you to reduce the value of your property for inheritance tax mitigation.

This is because releasing equity from your home reduces the overall value of your estate.

Many people are releasing money from their home and gifting this money to their loved ones instead of leaving them the property, as equity release funds are tax-free.

Can you choose to repay the loan early?

Yes, you are able to repay your equity release loan early if you wish to do so.

This will reduce the overall amount of compound interest you are charged, so will reduce the overall loan amount, too.

By doing so, there might be some inheritance left over for your loved ones to enjoy after the house is sold and the loan repaid.

However, it is important to remember that some lenders will charge you an early repayment fee for repaying your loan early.

Most lenders allow you to repay up to 10% of the value of your loan annually before they start charging you.

If you wish to learn more about how you might be able to make some early repayment fees and reduce the overall amount of your loan, then talk to a member of the Equity Release Warehouse for help and support.

An Early Repayment Charge (ERC) in equity release is a fee that you may have to pay if you choose to repay your equity release plan earlier than agreed.

This charge is applied to discourage borrowers from repaying the loan prematurely, since equity release schemes are typically designed to last until you pass away or move into long-term care.

ERCs are structured differently across various plans and providers:

• Fixed ERCs: These charges are a fixed percentage of the amount repaid early and are often calculated based on the initial loan amount or the current balance.
• Variable ERCs: These may be linked to an external factor like the interest rate environment. For instance, if interest rates fall significantly from when you took out the plan, the ERC might be higher, as the lender is compensating for the lower returns on reinvesting your repayment.
• Some plans have ERCs that decrease over time: For example, the charge might be higher if you repay within the first five years but decrease incrementally after that.

It’s important to read the terms and conditions of your equity release plan carefully to understand the potential costs associated with early repayment.

What are the advantages of equity release in Telford?

There are numerous advantages to equity release in Telford. Firstly, you are able to gain access to a tax free amount of cash, which you are free to spend on whatever you want.

Secondly, you aren’t forced into making any monthly repayments with equity release in Telford as the loan is only ever repaid after you pass away or move into a care home.

You are also able to make voluntary repayments if you choose to do so, which will reduce the overall loan amount [3].

The equity release industry is now heavily monitored and regulated by the Financial Conduct Authority and Equity Release Council, so the level of risk is lower than ever.

All advisors are listed on the Financial Services Register, and if you are unhappy about the advice you receive, you can complain to the Financial Ombudsman Service and claim compensation (with protection under the Financial Services Compensation Scheme) if your complaint is upheld.

All equity release schemes must now include a no negative equity guarantee, which means that even if your home decreases in value and fails to cover the loan amount, your lender will step in to pay the difference.

What are the disadvantages to equity release in Telford?

Any qualified equity release adviser will also talk to you about the disadvantages of equity release and risks of taking out an equity release mortgage.

Releasing equity from your home is a huge decision for both you and your family, so therefore it is only fair that you have all of the relevant and necessary information.

Firstly, taking out an equity release loan is taking out another type of mortgage, which will always involve a certain level of risk.

Not only does taking out an equity release loan mean that your loved ones might not get as much inheritance as they might have hoped for, but you are less flexible when it comes to moving home in the future [3].

Once you take out an equity release loan, you will then be prevented from taking out another type of loan against your home.

Not to forget, you will be charged interest on your equity release loan.

As the loan will continue for as long as you live, you will build up a significant amount of compound interest which will be added to the overall loan amount [3].

If you wish to repay some of your loan early or wish to exit the loan totally, then you will be charged early repayment and early exit fees.

These will be a percentage of the total loan amount left to pay, which could end up being a significant amount of money to repay later in life [3].

Finally, there are a number of set-up costs associated with taking out an equity release loan which are unavoidable.

This will include things such as the cost of an equity release adviser, a solicitor, a home valuation and not to forget the interest you will be charged on your loan.

Some of these set-up costs will need to be paid upfront, whereas some can be paid after you receive your equity release funds.

Also, equity release may impact some means-tested benefits, such as Pension Credits, Council Tax Support, and Jobseeker’s Allowance. Equity release payments may mean you are no longer eligible for these benefits, so please check before you apply for equity release.

You can read about the alternatives to equity release here.

For instance, if you can restructure your finances, you might be able to achieve your financial goals without applying for equity release. You can contact organisations such as MoneyHelper to help you achieve this aim. You can also get help via Telford and Wrekin Council.

Get help now in Telford and across the West Midlands

Contact Equity Release Warehouse now for equity release advice in Telford, and across the region in Wellington, Oakengates, Birmingham, Shropshire, Shrewsbury, Solihull, Stourbridge, Tamworth, Walsall, Welshpool, Worcestershire and Oswestry.

References

[1] https://www.equityreleasewarehouse.com/help-centre/

[2] https://www.lloydsbank.com/mortgages/equity-release-mortgages/am-i-eligible-for-equity-release.html

[3] https://www.equityreleasecouncil.com/what-is-equity-release/