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Equity Release Midlands
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Facts

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Do I Qualify?

You need to be: 

  • Over 55.
  • A UK homeowner.
  • Living in your home and it be worth a minimum of £70,000

Is it Safe?

Equity Release  is fully regulated by the Financial Conduct Authority (FCA) - all of our plans meet the Equity Release Council standards, offering additional protection.  Equity release is probably one of the most regulated financial products in the market and has many safeguards which have been in place for many years .  Reputable advisers, solicitors & lenders will belong to the Equity Release Council and adhere to their rules and guidance   which aim to ensure that its members are highly professional and act with integrity and transparency in offering high-quality products and services to customers. 

You need Advice

Equity release is an important financial decision. It’s a regulatory requirement set out by the FCA that you can only obtain an Equity Release plan after you have had the correct advice from a properly qualified adviser.If equity release isn’t right for you, we'll tell you. 

How long does it take?

Typically 6-8 weeks but this is very much dependent on an individuals specific  circumstances.


The process involves an initial  detailed fact find by the adviser to assess needs and suitability and answer any questions followed by a second meeting to make a recommendation (if appropriate) and answer any further questions .


If the client wants to proceed then a valuation would be carried out by the lender who would then proceed to issue an offer.


Following this conveyancers  (solicitors) would then also conduct an appointment to finalise legal matters and proceed to completion


Factors which may effect this timescale include unregistered properties, transfer of ownership i.e. sole to joint names, requesting redemption statements, leasehold properties and leased solar panels.

Positives

Equity Release utilises an asset – your home, which for most people is often their biggest one, however you cant spend your home! 


Having the ability to ‘draw’ on the capital value of your property can allow you to do many things to make your retirement more enjoyable i.e. additional income, holidays, new car, home improvements but also home adaptations, care costs and continued independence.


Often clients use funds now to provide ‘pre-inheritance ‘ to their children or grand-children in order to assist them with debt repayment, deposit for their own property, school fees or extended family holidays.


Most Lifetime mortgages have an interest rate which is fixed for life with no compulsory repayments.


You can chose to take funds either as one lump sum or across a period of time.


Ability to service interest ( and even some capital) on a voluntary basis if so desired.


Ability to protect or guarantee a portion of inheritance


All plans that meet the Equity Release Council's standards come with a 'no negative equity guarantee' meaning you can never owe more than the value of your home nor pass a debt onto your beneficiaries.


Rates of interest are mostly fixed for life so you can see from the outset how the debt will increase over time (assuming you don’t service the interest) and compare this to the estimated value of your property over the same time whilst getting enjoyment  from the funds released and possibly reducing your beneficiaries future inheritance tax bill as it will create a debt on the estate!

Downsides

Equity Release is a very transparent form of borrowing ( due to its strict regulation) however there are certain risks that you should be aware of:

  

Equity release is different from other forms of borrowing because you don’t have to make any monthly repayments unless you want to. Therefore if the interest is not paid it will ' roll up' or 'compound'.

As the interest is rolled up, then the total amount to be repaid could increase significantly over time.


Just like any mortgage or other form of borrowing, both the amount you initially borrow plus the accruing interest must be repaid at some point in the future, with an Equity Release this is when you permanently vacate the property i.e in the event of death, moving or being taken in to permanent full time care.


Depending on your provider you may be required to pay early repayment charges in certain circumstances if you repay your borrowing early.


Because Equity has been release from the property this will reduce the value of inheritance for any beneficiaries.


Some clients can see an impact on means tested state benefits. Your adviser will perform a check and discuss this with you accordingly to see if it affects you.

Can I move home?

All our Lifetime mortgages plans allow you to move or port subject to lenders criteria and terms and conditions

How much does it cost?

  

To take out an equity release plan you must have financial advice, but the costs for this can vary dramatically as some brokers charge a fee based upon a percentage of the amount you borrow.


At Equity Release Midlands we believe this is unfair.


The advice process involves a comprehensive assessment of your circumstances, researching the market, advising on and then processing your application. The work involved is the same if you borrow £10,000 or £500,000. 

So, we pass this saving onto you, our customers.


That’s why our fee is guaranteed to never be more than a competitive £1295.


There are 4 ‘potential’ fees that can be incurred in arranging an equity Release – lifetime mortgage:


- Lender Valuation

Most Lenders don't currently charge valuation fee*

- Lender Arrangement

Most plans don't carry an arrangement fee**

- Equity Release Adviser

Fixed at £1295

- Solicitor's

Estimated between £650-£750 for standard conveyancing including a home visit service

(however additional charges can apply for additional work)


*Given the competitive nature of the market at present most lenders don’t currently charge a valuation fee.

**Many plans don’t carry a lender arrangement fee however if they did the average would be around £600.  

Fees are not usually not required until completion of the case so could be included / added to the initial release amount ,or paid up front.

Will it affect my tax situation?

 The money released from equity release is not usually taxed via either Income Tax or Capital Gains Tax, however it may affect your tax position overall 

Can I take out Equity Release if I already have a mortgage in place?

Yes, but this depends on how much you currently owe, how long you have left on your current mortgage and your current interest rate to see if it is a suitable alternative.

Alternatives to Equity Release

  • Downsizing

Selling and moving to another property


  • Other financial borrowing 

Such as a loan or conventional mortgage


  • Utilise existing savings , investments or Pensions

Consider using current assets already available


  • Assistance from family members

Your family members maybe willing to offer financial assistance


  • Claiming additional benefits

are you receiving all you are entitled too?



 To understand the features and risks of a Lifetime Mortgage, please ask for a personalised illustration. 

Find out more

ERM Brochure

Your guide to Equity Release

Download PDF

ERC Brochure

Download PDF
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Equity Release Midlands, your local experts

Equity Release Midlands is a trading style of The Later Life Lending Network Ltd, an appointed representative of The Right Mortgage Ltd who are authorised and regulated by the Financial Conduct Authority. Registered in England and Wales no. 09832887. Registered address: 70 St.Johns Close, Knowle, Solihull, England, B93 0NH. For Independent Equity Release advice we do not charge any upfront fees however, a fee of £1295 is payable on completion for our service in relation to lifetime mortgage contracts plus commission from the lender.The Information contained in this website is subject to UK regulatory regime and is therefore intended for consumers based in the UK.

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