Equity Release Warrington - Lifetime Mortgage Near Me

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

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Equity release is another form of mortgage or loan, available only to those aged 55 or over.

Equity release loans aren’t like other mortgages and loans, in that you do not have to repay the loan until after you pass away or move into a care home.

The loan is only ever repaid once your house is sold and the proceeds from the sale of the home will repay the loan, hopefully in full [1].

You are charged interest on your equity release loan, which will be added to the overall loan amount.

This overall, final loan amount will then need to be repaid through the proceeds of the sale of the house. This means that this money will not go to your loved ones as inheritance.

All interest rates with equity release loans are fixed, meaning that the amount of interest you pay each month and each year will stay the same.

This means that although your loan will be increasing each year, you will be able to forecast from the very start just how much your loan will amount to year on year. Naturally, the longer you live the more you will owe.

The equity release industry is now heavily monitored and regulated by the Equity Release Council and Financial Conduct Authority, who ensure that all players across the industry are acting fairly and in the customers’ and homeowners’ best interests.

There are two main types of equity release loans, known as lifetime mortgages and home reversion plans. These two types of loans are very popular throughout the UK and are explained below in more detail for you.

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What are the differences between lifetime mortgages and home reversion plans?

There are some major and key differences between lifetime mortgage and home reversion plans.

For example, lifetime mortgages are by far the most popular option for equity release as they allow you to remain the sole owner of your home for as long as you want.

However, with home reversion plans you do have to sell a percentage of your home in exchange for your equity.

This could be as much as 90% of your home, or as little as 10%. The more of your home you sell, the more equity you will gain access to.

The other key difference between lifetime mortgages and home reversion plans are that with lifetime mortgages, you will be charged fixed interest on your loan which will increase and turn into compound interest year on year.

If you are confused about the differences between lifetime mortgages and home reversion plans, then make sure you speak to a qualified equity release adviser or specialist before making any final decisions for applying for any loans.

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Do I pay interest on equity release in Warrington?

Yes, you do pay interest on lifetime mortgages. As with any type of loan, the longer you are charged interest then the more your interest will compound.

The more your interest compounds, the more your final loan amount will be. Compound interest is essentially interest on interest, and you can imagine how much this could amount to if your interest rates are high.

It is important to understand that with any equity release loan, your interest rate will always remain fixed. This means that no matter what happens, the amount of interest you are charged each month will stay the same.

This means that from the very start, you will be able to tell how much you will owe year on year, for as long as you live.

The longer you live, the more your overall loan amount will be. When first applying for an equity release loan, make sure to ask your adviser and lender for your illustration, which will outline your interest rate and how much you will owe.

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Reasons why people opt for equity release in Warrington

There are a number of reasons why people opt for equity release in Warrington.

You should always be open and honest with your equity release adviser about why you’re choosing to release equity from your home. Some of these reasons are listed below for you.

1. Access to more cash in retirement

A lot of people opt for equity release in Warrington because they need more access to cash in their retirement.

Whilst we all dream of a relaxing and comfortable retirement, it’s not always the case. More pensioners than ever are struggling and having to work through their retirement years to afford the rising cost of living.

Equity release provides the perfect answer for a lot of pensioners who might have a lot of their wealth and cash tied up in their property.

With equity release, you do not have to worry about repaying the loan until after you pass away via the sale of your home.

2. Flexible spending

One of the best things about equity release in Warrington is that you get to spend the equity and money you receive on almost whatever you want.

When it comes to equity release in Warrington, there are very few restrictions on what you can’t spend your money on.

Most people spend their equity release money on home improvements, a better lifestyle or helping their loved ones with the cost of living or the cost of further education.

Whatever you choose to spend your equity release money on, make sure you inform your equity release adviser of your plans, as how you choose to spend your money might impact what type of equity release plan or loan you are best suited to.

3. Enjoy gifting money to loved ones

Lots of people leave their loved ones their inheritance. Whilst this is hugely generous and kind, a lot of pensioners are therefore unable to see their loved ones enjoy their inheritance. This is why a lot of people opt for equity release in Warrington.

With equity release in Warrington, you can opt to gift your money to your loved ones and next of kin(s).

By doing so, you will get to see them enjoy your money whilst you’re still alive.

You could watch your grandchildren go to University or buy a house, or treat your family to a once-in-a-lifetime family holiday or trip that they will remember forever.

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Pros and cons of equity release in Warrington

If you are considering opting for equity release in Warrington, then you need to be aware of all of the pros and cons surrounding equity release in Warrington, in order to make an informed decision.

1. Pros of equity release in Warrington

There are numerous pros associated with equity release in Warrington.

For example, you are free to spend your equity release funds on whatever you want, within reason and as long as you inform your equity release adviser of your plans from the get go. How you plan on spending your funds will determine what type of loan you should opt for.

Additionally, you are not taxed on the money you receive. Not only this, but the interest you are charged on your loan will be fixed.

This means that the amount you owe is easily forecastable from the start, as your interest rate will remain the same.

You also do not have to repay the loan until after you pass away, meaning that you can enjoy your loan without having to worry about any monthly repayments.

This is particularly handy if you still have a mortgage to pay off, as you can use the equity release money to pay off your mortgage so that you are going into your retirement completely debt-free.

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2. Cons of equity release in Warrington

Any good equity release adviser will be open and honest about the cons associated with equity release in Warrington, as well as the pros.

At Equity Release Warehouse, we are entirely open, honest and transparent about these disadvantages, as it’s important that you have all of the relevant information about equity release in Warrington in order to make an informed decision.

For example, whilst interest rates with equity release might be fixed, the interest you are charged on your equity release loan will compound each year.

This essentially means that you will be charged interest on interest, meaning that the amount you owe will increase and compound each year.

Likewise, if you opt for equity release in Warrington then it is important to understand that some of your means-tested benefits might stop, should you receive them or plan to receive them in the future.

You can read about the alternatives of equity release here.

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What is the Equity Release Council?

The Equity Release Council is a consumer trade body, focussing on empowering those within the equity release industry to maintain high standards.

They have four key values, which are authoritative, progressive, incisive and trustworthy. They ensure that all lenders, solicitors and advisers are monitored and have set standards and features.

If you are a member of the Equity Release Council, which all lenders and advisers should be, then you are agreeing to be fair and transparent, as well as acting in the best interest of the public and your client.