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Bishop Auckland, DL14 7LJ

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david@ashcroftmortgages.co.uk

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What Is Equity Release?

Equity release refers to a range of products that let you access the equity (cash) tied up in your home if you are over the age of 55. You can take the money you release as a lump sum or, in several smaller amounts or as a combination of both.

There are two types of Equity Release mortgages, which are:

Lifetime and Reversion With a home reversion scheme, you sell all or part of your property at less than its market value in return for a tax free lump sum, a regular income, or both, but stay on in your home as a tenant, paying no rent.
We only offer advice on Lifetime mortgages therefore my advice and service is restricted and not independent when it comes to advising on Equity Release Mortgages.

If your Equity Release product has an option to roll up the interest (you do not make any interest payments) under new Financial Conduct Authority rules, the mortgage lender may now not have to carry out affordability checks to see if you can afford to make interest payments.

 

When Considering a Lifetime Mortgage It’s useful To Know:

The minimum age at which you can take out a lifetime mortgage. Usually it’s 55. We’re all living longer so the earlier you start the more it is likely to cost in the long run.

The maximum percentage you can borrow. You can normally borrow up to 60% of the value of your property. How much can be released is dependent on your age and the value of your property. The percentage typically increases according to your age when you take out the lifetime mortgage, while some providers may offer larger sums to those with certain past or present medical conditions.

Interest rates must be fixed or, if they are variable, there must be a ‘cap’ (upper limit) which is fixed for the life of the loan (Equity Release Council standard).

You Should Also Know:

You have the right to remain in your property for life or until you need to move into long term care, provided the property remains your main residence and you abide by the terms and conditions of your contract. (Equity Release Council standard).

The product has a ‘no negative equity guarantee’. This means that when your property is sold, and agents’ and solicitors’ fees have been paid, even if the amount left is not enough to repay the outstanding loan to your provider, neither you nor your estate will be liable to pay any more (Equity Release Council standard).

You have the right to move to another property subject to the new property being acceptable to your product provider as continuing security for your equity release loan (Equity Release Council standard). Different lifetime mortgage providers may have slightly different thresholds.

Withdrawing Equity

Whether you can pay none, some or all of the interest. If you can make repayments, the mortgage will be less costly. However, with a lifetime mortgage where you can make monthly payments, the amount you can repay may be based on your income. Providers may have to check if you can afford these payments.

Is It Right For You?

My advice would help you make an informed decision and will tell you straight away if equity release isn’t right for you.

What to consider before you take out an equity release plan. You should always consider other ways to release equity from your home such as selling and downsizing before entering into a lifetime mortgage.

Points to Consider:

Being qualified to give advice on Lifetime Equity Release Mortgages we will search the whole market to find the best plan for every customer.

Equity Release plans, aren’t right for everyone. We always welcome family members to attend your consultation to find out how their inheritance would be affected. All plans will reduce the value of your estate.

I would also advise you which is any benefits you may be in receive of, if any, would be affected. Equity Release may affect your tax position and could affect your entitlement to means tested benefits.

Lifetime Mortgages

Most people who take out equity release use a Lifetime Mortgage usually you don’t have to make any repayments while you’re alive, interest ‘rolls up’ (unpaid interest is added to the loan). This means that the debt can increase quite quickly over a period of time.


However, some lifetime mortgages do now offer you the option to pay all or some of the interest, and some let you pay off the interest and capital.
In the same way that ordinary mortgages vary from lender to lender, so do lifetime mortgages. When considering a lifetime mortgage, it’s useful to know:

• The minimum age at which you can take out a lifetime mortgage. Usually it’s 55. We’re all living longer so the earlier you start the more it is likely to cost in the long run.

• The maximum percentage you can borrow. You can normally borrow up to 60% of the value of your property. How much can be released is dependent on your age and the value of your property. The percentage typically increases according to your age when you take out the lifetime mortgage, while some providers may offer larger sums to those with certain past or present medical conditions.

• Interest rates must be fixed or, if they are variable, there must be a “cap” (upper limit) which is fixed for the life of the loan (Equity Release Council standard).

Is It Right For You?

You have the right to remain in your property for life or until you need to move into long term care, provided the property remains your main residence and you abide by the terms and conditions of your contract. (Equity Release Council standard).
• If the product has a “no negative equity guarantee”. This means that when your property is sold, and agents’ and solicitors’ fees have been paid, even if the amount left is not enough to repay the outstanding loan to your provider, neither you nor your estate will be liable to pay any more (Equity Release Council standard).


• You have the right to move to another property subject to the new property being acceptable to your product provider as continuing security for your equity release loan (Equity Release Council standard). Different lifetime mortgage providers may have slightly different thresholds.
• Whether you can pay none, some or all of the interest. If you can make repayments, the mortgage will be less costly. However, with a lifetime mortgage where you can make monthly payments, the amount you can repay may be based on your income. Providers will have to check that you can afford these regular payments.


• Whether you can withdraw the equity you’re releasing in small amounts as and when you need it or whether you have to take it as one lump sum. The advantage of being able to take money out in smaller amounts is that you only pay the interest on the amount you’ve withdrawn. If you can take smaller lump sums, make sure you check if there’s a minimum amount.

Is it Right for You?

My advice would help you make an informed decision and will tell you straight away if equity release isn’t right for you.

What to consider before you take out an equity release plan – You should always consider other ways to release equity from your home such as selling and downsizing before entering into a lifetime mortgage.

Being qualified to give advice on Lifetime Equity Release Mortgages we will search the Lifetime mortgages market to find the best plan for customers but do not offer advice and recommendation on Reversion mortgages.

Equity release plans, aren’t right for everyone. We always welcome family members to attend your consultation to find out how their inheritance would be affected. All plans will reduce the value of your estate


I would also advice you which is any benefits you may be in receive of, if any, would be affected. Equity release may affect your tax position and could affect your entitlement to means tested benefits.


Because equity release is a lifetime commitment, it is only expected to be repaid upon your death, or entry into longterm care. We will explain the early repayment charges which may apply if you decide to repay the plan early

My advice will also help you to understand how the compound interest on a lifetime mortgage adds up, and how the amount you owe can grow quite quickly. Remember a lifetime mortgage is secured against your home. You should always think carefully before securing a loan against your property

With Equity release mortgages my advice and recommendation service is restricted to Lifetime mortgages only, therefore I do not offer advice on Reversion mortgages unless you decide to go ahead, my service is completely free of charge.

You Should Also Consider:

Because Equity Release is a lifetime commitment, it is only expected to be repaid upon your death, or entry into long-term care. We will explain the early repayment charges which may apply if you decide to repay the plan early.

My advice will also help you to understand how the compound interest on a lifetime mortgage adds up, and how the amount you owe can grow quite quickly. Remember a lifetime mortgage is secured against your home. You should always think carefully before securing a loan against your property.

My advice is restricted to lifetime mortgages. Unless you decide to go ahead, my service is completely free of charge.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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