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Lifetime Mortgages

Equity release is a way of releasing cash (equity) from your home while you still live there. The most popular type of equity release is called a lifetime mortgage, which is a loan secured on your home.

Lifetime mortgages are available to homeowners aged 55 or over. You can take the money as a lump sum, series of lump sums or as a regular income. No repayments are required until you die or move out of your home into long-term care.


1. How much cash could I receive?

In the event that you are thinking about the amount you could get as a lump sum amount, tax-exempt, from your home, drop us a line and we’ll be able to quickly calculate you an exact figure.

2. What is equity release?

To place it into straightforward terms, equity release is a method of taking a single amount, tax-exempt from the value of your home. It is a sort of home loan and the most well known sort is a lifetime mortgage. You can do this in various manners yet basically, you take out a mortgage that permits you to take equity (ie money) tied up in the property estimation. You can apply for this if you are over 55 and you don’t need to have taken care of your current mortgage to do this. For the most part, with regards to taking the money, you can do it as a solitary singular amount, split into many modest sums or a blend of the two. The cash you release would then be able to be spent on whatever you like! You can see a video on how equity release products work and interest rates here.

3. How does equity release work in the UK?

Simply, equity release plans work by allowing you to release money (known as ‘equity’) tied up in property assets.

This makes it an appealing decision for over 55s who wish to utilize the money to appreciate retirement, or put some in a safe spot for future care needs.

It works like a home loan by loaning home owners a single amount or or regular income (usually on a monthly basis), as a trade-off for a segment of their property. Cash is loaned against a value that adds up to less than the property estimation, and interest is accumulated on the sum you get.

At the point when you pass on, your estate will sell the house and the home loan paid off utilizing the wealth accrued.

While the advantages are clear, they won’t be right for everybody. They are anyway an awesome choice for couples and people without money reserves or extra assets, who might want to utilize cash right now tied up in their property estimation to pay for care.

4. What can I use the money for?

You are allowed to utilize the cash for nearly any purpose. The most popular uses are:

  • Top up your annuity – If your pension doesn’t exactly give you enough to live on then this is an super method to top it up.
  • A vacation of a lifetime – You may choose to treat yourself and even your family to a vacation that will provide memories that will last forever.
  • Pay for long term care – long term care can be costly, and the cash in your home might be required to pay for it. You can peruse more about this underneath.
  • Modify your home – If you decide to get care in the home, for example, live-in care, at that point you may have to adjust your home to make it more comfortable. For instance, you may have to make the washroom simpler to get around or add a stairlift. This implies that you can keep on living in your home as opposed to move into a care home.

5. How do I know if I am eligible for an equity release loan?

You should be a homeowner to apply for equity release. You don’t have to possess the home outright so a house with a current home loan actually makes you qualified.

All products are exclusively open to those that are beyond 55 years old. Notwithstanding, you should take note that the earlier you take out the loan the more drawn out the timeframe in which the interest amasses.

6. How much cash can I borrow with equity release?

Each lender will have their own principles, but ordinarily the greatest amount of money that they will loan you is 60% of your property estimation. In any case, the sum that you get will rely upon your age, so the older you are, the more you receive.

This article on how much can you borrow from equity release will be useful for you to read.

7. Will I still own my own home?

At the point when you take out a lifetime mortgage the lender will put a charge on the property title. Be that as it may, you will stay the lawful proprietor of the property.

8. Can I move house in the future?

The straightforward answer is yes you can. In any case, you should address your lender to reveal where you need to move to. Providing they are ok that your new property is appropriate to secure the advance against, then there ought to be no issue with it.

9. Can my partner or spouse continue in the house after I die?

Ordinarily they can keep living in the house. However, you need to ensure that when you take out the home loan it is written in joint names. On the off chance that it isn’t, at that point your partner or spouse may need to sell your home to take care of the mortgage.

10. What are the most popular types of equity release mortgage?

There are three types of mortgage that you look at.  These are:

  • Lifetime Mortgages –the most popular
  • Home Reversion Schemes
  • Drawdown Lifetime Mortgage

You can read and watch a short video explaining how each of these works below.

11. What is a negative equity guarantee?

For an equity release supplier to have their arrangement affirmed by the Equity Release Council, it must have a ‘no negative equity guarantee’.

This fundamentally means that when you utilize a lifetime mortgage you won’t ever owe more than the house is worth.

Click here for more information on the Equity Release Council.

12. What happens if I owe more than my house is worth when I die?

Since you have a negative equity promise it doesn’t make a difference if when your home is sold the sale price is not as much as what is owed.

The lender won’t have the option to return to your estate and request the difference  to be made up. However, in this scenario, it does mean that no proceeds from the sale of the house will be paid to your estate and family.

If you’re stressed over the interest that could be payable you can always choose not to ‘roll-up’ it up so that it is settled when the house is sold.

Like an interest-only mortgage, you can decide to make regular interest instalments for the duration of the loan.

This, thusly, keeps the remaining balance a fixed sum rather than one that increments throughout the years. Limiting this increment in the loan may be something that appeals to you and an advisor can clarify the advantages of this.

You can read more about what happens with equity release here. 

13. Will taking out an equity release mortgage affect my state benefits?

If you are in receipt of government benefits, at that point it is conceivable that any means-tested benefits you get may be affected. You can book a call with an advisor to explain what it might mean for you.

14. What happens if the lender I use goes bust?

Ordinarily what happens is that the mortgage you were given is sold or given to another moneylender. This implies that you will in any case have to keep paying the original loan on the agreed terms.

They won’t have the option to change the principles and force you to repay the advance any sooner than was initially agreed.

15. What happens if I change my mind?

If you do take put the loan and decide that you want to repay it before either the homeowner dies or moves into long term care, then it is possible that early repayment charges apply.  However, it is possible to get mortgages at the outset that allow early repayment.

16. What are the advantages and disadvantages of Equity Release

Similar to every single monetary investment, equity release plans have an assortment of upsides and downsides joined to them.

All in all, there are various advantages and disadvantages of an equity release plan – yet you’ll discover a range of products each with their own individual attributes.

Consequently, it’s essential to investigate your choices completely, and distinguish where products may contrast among lenders and even based on your individual position monetarily and personally.

As this is a particularly significant choice it is right that you do your research and make a rundown of all your equity release upsides and downsides.

Here is a video that takes a look at the pluses and drawbacks of an equity release plan:

Advantages of equity release
  • Retain Ownership – You’ll hold ownership of the property ongoing – or at least a segment of it. This empowers you to remain in your own home forever more – and leaves open a likelihood that you could hold some equity from your home at a later stage.
  • Spend YOUR cash – You are allowed to pick how to use the cash released from your property. For instance, you can utilize it to pay for care, re-invest it, gift money to family members or make essential enhancements at home.
  • Negative Equity Guarantees – This shields you from paying more than you borrowed should the property estimation drop altogether.
  • Gift as an inheritance – Some lenders permit you to secure a part of your property’s value separately to gift as a legacy. It might be possible to make partial  payments early should your circumstance change.
Disadvantages of equity release
  • Reduced inheritance – A characteristic of taking out an equity release plan is decreased inheritance – as you’ll not have the option to leave your property as a gift. Be that as it may, for those considering later life lending or care funding in the absence of time, this might be less of a worry.
  • Valuation not as much as the market rate – The sum you get against your property is regularly offered at a valuation lower than its market cost, so you could be out of pocket if your conditions change. You may likewise conclude it is ideal to sell up, albeit this would, imply that you will be not able to remain living at home.
  • Impact on tax status – Enrolment can influence your assessment status and qualification to certain government assisted benefits. Consequently, it merits getting guidance to get a more clear idea of what the change will mean for you monetarily.
  • Interest payments – Most plans accumulate interest – at fixed or variable rates. Completely research what suppliers and interest rates offer prior to settling on a choice.
  • Inflexible – They can be resolute once they have been taken out – so if your conditions are probably going to change later down the line this may not be the best thing for you. For instance, on the off chance that you go through the money released and run out of cash sooner than anticipated or need to move into a private care home, it could be hard to work around your present situation.

Always weigh up the equity release pros and cons with your own personal situation and prognosis in mind – especially if you plan on using the funds to pay for care.

For complex or particularly unique situations it may be imperative to enlist support from an experienced professional who can guide and advise you based on the information you provide.

17. Can equity release help with long-term care funding?

As funding for long term care turns into an issue for people and their families, it’s never been more imperative to weigh up and investigate the scope of options open to you.

In some cases the sheer measure of decisions feels overpowering – and when cash is tied up or hard to get to this normally adds to the pressure and dissatisfaction of the situation.

Equity release is turning into an undeniably popular decision for individuals and couples getting ready for later life – particularly those considering future care needs.

18. What are the benefits of using equity release to pay for care

Flexibility – It is an alluring option for couples and individuals thinking about how to support care later on or in the present moment since it is flexible and requires little disturbance or change.

Stay at home – Equity release plans empower the home owner(s) to stay at home, appreciating the same quality of life, without compromising in the short term.

Instant access to money – It gives instant access to cash, which you are allowed to spend anyway you like.

This is an appealing option for people requiring care who wish to stay at home in the long term, as it empowers them to remain where they are while giving enough funds to pay for care at home or vital changes or maintenance.

It might likewise be helpful for couples in case of one individual requiring private care – as one spouse or partner can stay at home while the other can appreciate the quality and level of care they require.

19. Can I remortgage to release equity in my home?

In the event that a conventional equity release plan isn’t a possibility for you, you may consider remortgaging to take out equity from your property. This is an option to consider when taking a look at paying for care.

If you are looking to remortgage to release equity in your home, this will include taking out another, bigger home loan to cover the remaining balance on your property and release a fixed sum for you to utilize anyway you wish.

Remortgaging can be complex, and ought to be led under the direction of a financial professional who can act with your best intentions at heart.

20. Can I get equity release if am are under 55?

Sadly, it’s impossible to apply for it in the event that you are under 55.

21. What impacts interest rates?

The mortgage interest rate that you will get will normally rely upon the measure of loan to value (LTV) you are taking.

In any case, ordinarily you would see rates beginning around 3% going up to about 7%. As should be obvious, the scope of lifetime mortgage rates that you can get is wide. That is the reason we emphatically prescribe that you address Connect Lifetime Mortgages to help you locate the most competitive rate.

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