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Lifetime Mortgage & General Equity Release Advice in Weymouth
Reviewed by Tom Philips
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Equity release in Weymouth is a really popular form of loan which allows pensioners or anyone over the age of 55 years old the chance to release money from their home without having to downsize or sell up.
Many pensioners and over 55’s are sitting on a large amount of equity in their home.
The equity inside your home includes the initial deposit you put down on your property, the monthly mortgage payments you have been making (minus the interest) and how much your property has increased in value by.
If you have lived in your property for a long time and have paid off your mortgage (or the majority of your mortgage) then you could be sitting on a substantial amount of equity in your home [1].
You are able to release a set amount of money from your home through an equity release loan.
You can do this either through a lump sum plan or through a drawdown plan. You are then free to spend your equity release loan on pretty much whatever you want [1].
The other great thing about equity release in Weymouth is that you do not have to repay your loan until after you pass away or move into a care home.
Once this happens, your next of kin(s) will be responsible for selling your property. The proceeds from the sale of this home will pay off the loan.
This is fantastic news, as it means that you won’t need to make any mandatory monthly repayments, as you might need to do with other types of loans.
It is important to understand that the proceeds from the sale of your home after you pass away or move into a care home should cover the entire cost of the loan.
If, for whatever reason, it does not, then your lender will step in to pay off the rest of the loan amount. This is called the no negative equity guarantee.
As with any other type of loan, you will be charged interest on your loan and the amount you choose to release from your home.
The amount of interest you are charged will be fixed, although it will compound each month. This means that your overall loan amount will increase month on month, year on year.
You are not forced to make any mandatory loan repayments with equity release. However, you can choose to make early repayments if you wish to do so. Most lenders will cap this to just 10%. If you wish to repay anything more than this, then you will be charged an early repayment fee.
The two main types of equity release in Weymouth are known as lifetime mortgages and home reversion plans.
These two types of plans are slightly different, so the type of loan you opt for needs to be right for you. If you are unsure, then ask your equity release adviser for more advice and support.
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If you are considering equity release in Weymouth then you need to be made aware that there are a number of set up costs that you will need to pay.
Some of these initial set up costs will need to be paid upfront, and some others can be paid once you receive your equity release funds.
To start with, you will need to pay for an equity release adviser. This is usually a percentage of your equity release loan and can be added onto the overall loan amount.
Alternatively, some equity release advisers are paid through the lender.
There are also valuation fees to be paid. This is the cost of a home valuation, which usually costs anything between £100 and £300.
This usually needs to be paid upfront.
You will also need to pay for the cost of an equity release solicitor. This solicitor will do a lot of the work for you, so they will charge you a considerable amount.
Depending on where you are based in the UK and how expensive your loan is, your equity release solicitor will charge you anything between £1,000 and £3,000 [2].
This will either need to be paid upfront or they will ask to be paid once you receive your equity release funds.
You must not forget that you will also be charged interest on your equity release loan.
This interest will be fixed for the duration of the loan, but it will compound each month and each year.
This will be an added cost and will snowball quite quickly.
You will need to repay this interest once you pass away or move into a care home via the proceeds from the sale of your home.
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The equity release conveyancing process is actually quite simple. If you are considering equity release then that must mean that you bought a house.
Releasing equity from your home isn’t too dissimilar to buying a house, as it usually takes 6 – 12 weeks to process and you have to engage a solicitor.
However, if you are considering equity release in Weymouth then it might mean that it has been a number of years since you bought a house. So, below is a little reminder of what the conveyancing process entails.
As you would with buying a house, you need to seek professional help.
With the normal house buying and conveyancing process, you seek advice from a mortgage adviser.
When it comes to equity release in Weymouth and the rest of the UK, you will need to seek advice from an equity release adviser.
Your equity release adviser will never put any pressure on you to release equity. Instead, they are only there to advise you and to provide you with the information you need to make an informed decision.
The next stage of the equity release process is that you need to engage an equity release solicitor.
They will then take on your case and will lead on the conveyancing process.
This can take a number of weeks to process, as it does with buying a home.
You should expect to wait approximately 6 – 12 weeks for the conveyancing process to take place.
You might choose to use the solicitor you used to buy your house, or find a solicitor who specialises in all things equity release.
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Once your loan has been approved and your solicitor has completed the conveyancing process, you should expect to receive your funds.
Your solicitor will be the one to send across your equity release funds, and they will go directly onto your account.
You will either have to opt for a drawdown plan or a lump sum, meaning that you will either receive a number of smaller payments or one large lump sum.
With equity release in Weymouth, there are a number of different things that you can spend your equity release funds on.
For example, a lot of pensioners choose to spend their equity release funds on home improvements, to make their home a more comfortable environment to grow old in. Completing home improvements might also add value to your home.
Alternatively, you might opt to spend your equity release funds on their loved ones, paying off house deposits or paying for a grandchild’s further education. This way, you get to see your loved ones spend and enjoy your inheritance.
Finally, you might simply choose to spend your equity release funds on yourself, to improve your lifestyle and quality of life as you age.
This could include things such as a new health club, joining a golf or leisure group or going on more holidays.
You might choose to buy a new car or pick up a few more hobbies, such as exercise or gardening.
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The no negative equity guarantee is in place in order to protect clients and homeowners who opt for equity release in Weymouth.
The no negative equity guarantee states that if your house decreases in value for whatever reason and the proceeds from the sale of the home no longer covers the loan amount, then your lender will step in and will legally have to pay the difference [3].
This takes the pressure off of your loved ones and your next of kin(s), as they will never find themselves responsible for paying off the remainder of your equity release loan.
If you are unsure as to whether or not your loan includes the no negative equity guarantee, then rest assured that all approved equity release loans across Weymouth and the rest of the UK will include the no negative equity guarantee, as per the Equity Release Council and Financial Conduct Authority’s rules and regulations [3].
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If you are considering equity release in Weymouth or across Dorset and want more help and support on what loan might be best for you, then speak to a member of the Equity Release Warehouse team.
Our team of specialist advisers will never put any pressure on you to make a decision. Instead, they are simply only there to inform you of both the pros and cons associated with equity release in Weymouth.
Start your equity release journey by getting in touch with our team today.
You can either call us on 0330 058 1579 or visit us online for more information.
[1] https://nationaldebtline.org/get-information/guides/equity-release-ew/
[2] https://www.equityreleasecouncil.com/what-is-equity-release/
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