When it comes to retirement planning, there are a lot of different options to choose from. One option that is growing in popularity is using an equity release adviser.
An equity release adviser can help you access the money tied up in your home so that you can use it for retirement planning. In this blog post, we will discuss how an equity release adviser can help you and what to consider when working with one.
What is equity release?
Equity releases allow individuals over 55 to increase the value of an property without having to sell it. Your property must cost at least £70,000 and the amount of loan required is usually at least £10000.
Tell me the different types of equity release?
Two types of equity releases are: These are the most popular types of equity releases are offered. You borrow a sum as part of a mortgage and the money is repaid by selling your home at the time of death. The borrower’s maximum loan amount varies from 18 per cent to 50 per cent of the property’s entire worth, based in general on the age of the borrower.
The resulting interest can be reduced by repaying the interest in a gradual fashion, and so that they do NOT deteriorate. If you decide not to repay your debt, there may also be an interest rollup on this mortgage. On the other hand if you decide to repay it early there might be early repayment charges.
How does equity release work?
Depending on your age and income you might be entitled to free equity in your mortgage. You could keep the house for the life of the house. The loan will repay the property loan when you die. That’s why you need to consult with equity release experts when making decisions. It can take some time to understand your situation.
Top equity release providers
The most common types of equity release are life-time loans, much better than alternative home reverse schemes. Let me list some of the largest lenders in life mortgages. All of these are approved by financial authorities.
Age Partnership Ltd* is an accredited broker and one of the main equity release providers in the UK but there is many others out there and we would recommend an independent financial adviser.
How do equity release fees work?
Equity release plans are various types and may be complicated. Often there are other costs associated with it. This is a list of the important things you should look for: Though you pay them one time, you will charge them interest when they are added in. Loans with lower application costs are more efficient for people seeking large sums of loan. All providers charge late payment fees, although many are lower. Normally, these charges could exceed 25% of the home loan’s value.
Tell me the typical interest rate for equity release?
Lifetime mortgages are extremely variable. The average rate of 5%, although others are below three percent. The more cheap offer may be less flexible. And this is why you need to consult an expert adviser to give you information on a lifetime mortgage.
Lifetime Mortgages:
A lifetime mortgage is a type of equity release, a loan secured against your home that allows you to release cash lump sum without needing to move out. You can either take the money as a lump sum or, in some cases, as smaller amounts over time.
The interest on a lifetime mortgage is usually charged at a fixed rate, meaning your repayments will stay the same throughout the term of the loan.
You can choose to make no monthly repayments, or you can make voluntary repayments to help reduce the amount of interest that accrues. The loan plus any accrued interest is repaid when you die or move into long-term care.
What other fees are involved with equity release?
When you take out lifetime mortgages their are other costs involved when
Arrangement fees
These are sometime charged by the equity release company for setting up the lifetime mortgage and many other providers charge these fees, some are larger than others so thats why it is useful to use an independent adviser as they will be able to tell you of the most cost effective options from the whole market.
Legal Fees
As with any type of mortgage you will need to instruct a solicitor, just like a regular mortgage the costs are generally the same and they usually work on a fixed fee basis.
Valuation fees
You will usually need to pay the equity release company a valuation fee. This is to assess the property to make sure it is suitable for the equity release company to lend against. This can be paid up front or it can be included in the lifetime mortgage amount if you don’t have the funds
Early repayments charges
A lifetime mortgage is designed to potentially last a lifetime, hence the name, but in certain circumstances people release equity and instruct an independent financial adviser to release equity for a shorter period, in this case there would be early repayment charges.
Before taking out a lifetime mortgage, seek equity release advice to help you make the best decision for you and your family
It can be a good way to make a quick retirement income. Some retirees are able to afford their expenses more quickly and others use the cash they’re getting for resale. You should speak to an equity release adviser that is regulated by the financial conduct authority, for advice on the process of releasing equity.
When is the best time to use an equity release provider?
The best time to use an independent equity release provider is when you are looking for independent advice on your options. This is particularly important if you are considering a lifetime mortgage, as there are many different products available and it can be difficult to understand the features and benefits of each one.
A good independent equity release adviser will be able to help you understand the different products available and make sure that you choose the right one for your needs.
The cost of equity release can be high
With several equity releases, interest rates rise and the loans are paid back if someone dies or goes into a long-term care facility. It is usually achieved by selling a property. Because interest rates have a compounding effect the debt can be rapidly increased.
In most cases, the amount of debt that you’re facing can be more than your home’s value. negative equity can be described. To prevent losing your credit score, you must take out an equity release plan with a creditor. They have a guaranteed no negative equity to make the house worthless.
There is a huge variety of products available
As a result, the market has increased dramatically over a long span. When you seek equity release advice, you’ll find an appropriate product for the situation. Equity release is classified in two broad categories: mortgages and reversion plans. Lifelong mortgages have fixed interest rates.
Unlike traditional repayments, you do not have to make monthly payments. Instead, your mortgage payments are automatically paid by paying your mortgage back once you sell the property. In a house-reversion plan.
Protect your family’s inheritance
If he takes an equity product, there’ll not be as much money left for the family in inheritances. Your property may also need selling if you don’t repay your mortgage.
A Equity Release Consultant will help you maximise your wealth. Equity release products can help protect the equity in one’s home as a guaranteed future inheritance. Before committing to a lifetime mortgage plan, you should talk to family members. Your family can be more willing to pay for their inheritance, this is a good thing.
Equity release advice can save you money
Equity release loans are a good tool to help people find the lowest cost loan available. Equity releases may ask borrowers for early repayments in return. The price of this product will increase with no penalties if it was purchased without early payment.
Some products offer interest payment plans for keeping debt down. You can also opt for an equity drawdown product based upon the drained equity. The adviser can advise on ways to lower your costs.
Calculator: How much equity can I release?
Use a calculator to calculate how much homeowners may need for retirement, it will be able to tell you the maximum amount of money you can release.
You can use an equity release calculator from any equity release company in the market and if you visit their websites they will state what equity release products they offer and how much equity you are able to release with them. They will also be able to show any potential early repayment charge if you want to pay off the loan early, this is either based on a percentage of the loan or can be pegged to government gilt yields but an expert adviser will be able to advise you on this.
How do I release equity?
For releasing equity of a property, you should contact a lifetime mortgage adviser.
Here’s what makes LG Embrey Advice different
Our advice is given at fixed prices of £995 and pays at the end, regardless of the value of a loan. Some companies often charge percentages from the lending amount, meaning there aren’t always clear amounts that one might pay for that money. It pays to contact a few advisers first before going ahead.
Our advisers look through all markets and assess each available life-money loan available. Our mortgage advice service will help reduce your stress by researching every possible provider and recommending only the most affordable option to suit your needs. Free first visit – no obligation – our knowledgeable advisors will answer your questions.
Introducing LG Embrey Advice
Our experts are committed to providing a clear understanding of what is involved and taking the time to understand your unique situation before offering a recommendation. They are paid rather than commissioned so you’ll only find the most beneficial solution.
Do I need an advisor for equity release?
How does one get advice on the subject? The rules require firms to supply equity release products with the advice. You may also need advice about financial options from a qualified professional financial advisor or use a free program such as StepChange.com.
How much do equity release advisers charge?
Most Equity Release consultants charge advice costs. Many advisors charge a percentage of borrowers’ loan amount ranging drastically. On larger loans it is very costly.
What are the dangers of equity release?
Can equity release have any negative impact on my financial life? You pay interest there are also early repayment charges on lifetime mortgages and this can sometimes be costly so it usually isn’t advisable as a short term solution.
Is there a better alternative to equity release?
We constantly look at alternatives for Equity releases with clients for their retirement planning. Including: Sale of assets, remuneration, asking for financial help from family or friends, grants, moving into cheaper housing, or means tested benefits or rent a room.
What is the best equity release product?
The best way to find out what the best product on the market is for you, is to speak with an independent whole of market adviser.
An independent whole of market adviser will be able to search the entire market to find you the most suitable deal based on your personal circumstances.
When taking out an equity release plan it’s important that you feel comfortable and confident with both the product and the provider. Make sure you ask your adviser plenty of questions, so that you understand everything about your plan before making a decision.
Your home may be repossessed if you do not keep up repayments on your mortgage.
If you’re considering equity release, seeking independent advice is crucial. An independent whole of market adviser will be able to search the entire market to find you the most suitable deal based on your personal circumstances.
When taking out an equity release plan it’s important that you feel comfortable and confident with both the product and the provider. Make sure you ask your adviser plenty of questions, so that you understand everything about your plan before making a decision.
Your home may be repossessed if you do not keep up repayments on your mortgage.
If you’re considering equity release, seeking independent advice is crucial. An independent whole of market adviser will be able to search the entire market to find you the most suitable deal based on your personal circumstances.
Home Reversion Plans:
With a home reversion plan, you sell all or part of your property to a provider in return for a lump sum or regular payments. The provider will usually pay you a percentage of the current market value of your property, so it’s important to bear in mind that the amount you receive may be less than the eventual sale value of your property.
The home reversion provider will own part of your home and you will have to abide by strict rules and upkeep the property to their requirements, home reversion schemes tend to offer more money against your home but you won’t own 100% of it anymore. For this reason there are not many people who offer this type of equity release advice and therefore lifetime mortgages are a much more commonly used type of equity release scheme.
It’s important to consider how this could affect your eligibility for state benefits and whether selling part of your home could have an impact on any inheritance you wish to leave behind.
Equity Release Council
LG Embrey Financial Planning always use lifetime mortgages that are approved by the equity release council, this provides protection to clients who are going through the equity release process. We offer a fixed fee advice service on every equity release product that we recommend.
The equity release council is there to protect people and only approves the best equity release companies and this will mean they show the equity release council logo on their website. LG Embrey Financial planning only use companies that are approved by the financial conduct authority and equity release council.
LG Embrey Advice
If you are looking to potentially release a tax free cash lump then LG Embrey Financial Planning are independent financial advisers registered with the financial conduct authority.
So you can be sure that that you will be getting an unbiased equity release service and we will provide the best equity release advice for your equity release scheme.
We area whole of market independent financial adviser that provide a lifetime mortgage for any purpose from home improvements to a new car or even release money to pay off an existing mortgage is very common, we don’t have a limited range of lifetime mortgage providers to choose from as we whole of market mortgage advisers.
