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Equity Release in Basingstoke

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Equity Release in Basingstoke

If you live in the UK, are aged over 55 years old and own your own home then you will most likely have heard the term ‘equity release’ before. Millions of people throughout the UK consider releasing equity from their home each year as a way of freeing up some cash.

In fact, equity release in Basingstoke is improving an increasingly popular option for those aged 55 and over.

Equity release in Basingstoke is a great way of releasing and unlocking the cash that is currently tied up in your property.

As you will be well aware, owning your own home means that each month you pay into your mortgage, of which some is interest and the rest is a form of savings for you and your family.

The longer you live in your house, the more of the mortgage you pay off and the more equity builds up. When you add these monthly mortgage repayments onto your initial deposit on the house as well as any increases in value to the property this can add up to a hefty sum of money.

Equity release is only for those aged 55 or over, who own their own home in the UK worth a value of £70,000 or more.

In order to qualify for equity release in Basingstoke you will need to have paid off a large partition of your mortgage, and will be expected to pay off the remainder with the equity release funds if you have not paid it off already.

When you choose to release equity from your home in Basingstoke, there are a number of schemes and plans to choose from. Some of these plans will allow you to release your money in one large sum (known as a lump sum mortgage) and others will allow you to receive monthly payments which you can receive on a monthly basis.

The very best thing about equity release in Basingstoke is that you do not have to pay off a penny of the loan if you do not want to. The loan is paid off in the event of your death.

Once you pass away, your next of kin and loved ones will be responsible for selling your house and using the money to pay off the loan. Anything that is left over after this is theirs for the keeping!

Equity release in Basingstoke should be viewed as another form of loan or mortgage. As with any loan or mortgage you will be charged interest.

Unfortunately, interest rates on equity release loans in Basingstoke are typically more expensive than they are with traditional mortgages due to the nature of the loan.

Clients are allowed to ignore this interest and wait for it to be paid off once you pass away or move into a care home, upon which your house will be paid and the loan and any interest will be paid off.

However, in order to avoid compound interest from accumulating you can choose to pay off this interest as you go, whilst you are still alive.

Equity release works in several forms. It can take the form of a mortgage loan that is never paid off until the borrower dies. There are other finance options to consider if you have dependents to who you’d like to leave an inheritance.

If you are considering equity release in Basingstoke, make the first steps today by speaking to our friendly, professional and above all else, experienced at Equity Release Warehouse.

They will be able to talk you through the process of equity release, and will highlight the key differences between the two main forms of equity release in Basingstoke, which are also explained below.

Please call our 24-Hour Helpline: 0330 058 1579

Lifetime Mortgages VS Home Reversion Plans [1]

Below, we outline the key differences between a lifetime mortgage and home reversion plan:

Lifetime mortgages

Lifetime mortgages are the most popular type of equity release in Basingstoke and across other towns and cities in the UK. When someone chooses a lifetime mortgage in Basingstoke, they will receive a percentage of their property’s value in equity, which will be sent tax-free to your bank account.

Once the loan has been approved and sent to you, you will then be charged interest on your loan. You can either pay this off as you go or allow it to compound over the years and get paid off once your property is sold – it is entirely up to you.

Once you pass away and your loved ones sell your house, the loan and any interest will be paid off using the money from the sale. Your next of kin(s) will receive whatever is left an inheritance.

If you think that you would like to qualify for a lifetime mortgage in Basingstoke, then you will need to be aged at least 55 years old, own your own home in the UK with a a value of at least £70,000 and must have paid off a large sum of your mortgage already.

Whilst each lender is different, the general age to qualify is 55 years old, but this does differ amongst lenders and loans.

In order to qualify for equity release in Basingstoke, your house must be your main residence, meaning that you spend the majority of your time in that property and no other house. You also cannot have any secured debts against that house.

The advantages of a lifetime mortgage

As lifetime mortgages are the most popular type of equity release across Basingstoke and the rest of the UK, there are many advantages to lifetime mortgages. Some of these advantages are listed below.

  • You are allowed to stay living in your house for as long as you want and will never be asked to move, not by a lender, bank or adviser
  • The money you receive will be tax free and sent directly to your bank account
  • You do not have to repay the loan whilst you are still alive
  • You are still able to leave your loved ones inheritance
  • You can release up to 60% of the value of your property
  • You can spend the equity release money on whatever you want
  • You can even opt to pay off some of the interest on your loan to ensure that your next of kin receive their inheritance

As you can see, there are many benefits to lifetime mortgages and equity release in Basingstoke. If you think you would like to opt for a lifetime mortgage then make sure you speak to the Equity Release Warehouse team for more information before making any final decisions.

Home reversion plans

The second and less common type of equity release in Basingstoke is home reversion plans. Home reversion plans are nowhere near as popular as lifetime mortgages as they typically mean that you leave your next of kin and loved ones less inheritance after you pass away and pay off the loan.

This is because when you opt for a home reversion plan, in order to access your equity release you have to sell a portion of your house to the lender. Sometimes this can be as much as 80% of the property.

This means that when you come to sell the house, the lender would receive 80% of the sale proceeds, as they technically own that percentage of the property.

However, as with lifetime mortgages, individuals do not have to pay back a penny of their home reversion equity release plan whilst they are alive – this will be paid back when they pass away or need to move into a care home.

When this happens, the property is sold and the lender receives their percentage of the sale. In addition to this, the rest of the loan will need to be paid off. As you can see, this would result in less inheritance for your loved ones than if they were to opt for a lifetime mortgage.

If you would like to qualify for a home reversion plan then you will need to be aged slightly older than a lifetime mortgage. For a home reversion plan you will generally need to be aged 65 or over, although this age does differ across lenders and types of loans.

As with a lifetime equity release mortgage, you need to have paid off most of your initial mortgage and are not allowed to have any secured debts against the property.

The advantages of a home reversion plan

Whilst opting for a home reversion plan might result in less inheritance for your loved ones and next of kin, there are still lots of reasons why someone would choose a home reversion plan. Some of these reasons are listed and explained below.

  • You can release a large percentage of the value of your home, usually up to 80%
  • All money you receive is tax-free and sent directly to your bank account
  • You are allowed to spend the money however you want to
  • You do not have to repay anything if you do not want to
  • You will never be asked to move house, even when you sell a percentage of the property to the lender

There are many reasons why someone would choose a home reversion plan in Basingstoke. If you want more information on home reversion plans, then speak to our friendly and highly qualified team for help and support.

Please call our 24-Hour Helpline: 0330 058 1579

Equity Release in Basingstoke – How Much Will This Cost Me?

The costs for each equity release plan are different, as they usually tend to depend on a number of different factors including how much equity you want to release, the value of your property and which advisor and solicitor you choose to go with.

However, on average most equity release plans end up costing the individual approximately between 2% – 5% of the equity released. It is also important to remember that interest rates on equity release loans are fixed.

This means that you will be able to see exactly how much your equity release loan will cost you in the initial mortgage illustration drawn up by your advisor.

Interest rates on equity release loans across Basingstoke and the rest of the UK are also typically higher than they are with traditional mortgages, so do not expect to see lower interest rates.

Your equity release advisor will also be keen to remind you that interest rates on an equity release loan are also quick to accumulate and turn into compound interest. This will end up costing you and your family (your next of kin) more money in the long run.

There are also a list of set-up costs associated with equity release in Basingstoke. For example, you will have to pay an equity release advisor for their time and expertise, as well as for a solicitor to help you to navigate the contract and act as a middleman between you and the lender.

How much these costs depend on who you decide to go with, which is why Equity Release Warehouse always advises that you shop around for the best deals in your area before committing to a lawyer.

These costs can add up to anywhere between £2,000 and £5,000 depending on how complicated your application is and who you go with.

In order to get a good idea of how much your property is now worth, you will have to pay a valuation fee during the early stages of your application. However, this is usually only around £100 – £200.

If you are considering equity release in Basingstoke and want more clarification on how much equity release in Basingstoke costs, then call Equity Release Warehouse for more information.

Please call our 24-Hour Helpline: 0330 058 1579

How Can Equity Release in Basingstoke Help You?

One of the best things about equity release in Basingstoke is that you can use the money you receive however you want to. Many people use this money to help their future selves, loved ones or to treat themselves.

For example, you might decide that in order to make the most of your equity release funds, you want to spend the cash on home improvements. At Equity Release Warehouse, we think this is one of the best ways that you can spend your money.

This will not only improve your quality of life, but it will also usually increase the value of your home, so that your loved ones get as much inheritance as possible.

Why not use the money to pay for an extension? Alternatively, why not use the money to make your home more suitable and comfortable for later life?

If home improvements aren’t for you, why not treat your loved ones to a helping hand? Lots of people who release equity from their home do so because they want to help their family and loved ones.

Let’s face it, it is harder and more expensive than ever to buy a house or go to University. Therefore, why not pay for a grandchild’s house deposit or university fees?

Finally, other people choose to treat themselves with their equity release funds. This could be on a once-in-a-lifetime holiday, to that new car you have always dreamt of or to more days out with the family.

Whatever your reason for choosing equity release in Basingstoke, make sure that you make the money work for you. This means that you should always ensure that you are using the money in the very best way that works for you and your family.

When you first speak to your equity release advisor, they will want to know your motivations for choosing equity release in Basingstoke.

This might feel like a really personal question at first. However, you must remember that your equity release advisor needs to know what you plan on spending your money on so that they can make an informed decision on what loans and plans might be best for you.

Please call our 24-Hour Helpline: 0330 058 1579

How Much Equity Will I Be Able to Release?

The big question everyone wants to know the answer to when they consider equity release in Basingstoke is ‘how much equity will I be able to release?’

This is often a hard question to answer, as it does depend on a number of different factors. However, most people across Basingstoke and the rest of the UK are usually able to release approximately 20% – 50% of the value of their home.

As discussed, this does depend on a number of different influential factors, most notably how old you are and how much your property is valued to be worth.

For example, if you are older and your property is worth a considerable amount of money, then you will most likely be able to release more equity from your home.

Some of the influencing factors are explained in more detail below.

1. Your health

In addition to your age, your health will also play a huge role in determining how much equity you are allowed to release from your home in Basingstoke.

If you apply for equity release with someone else in a joint ownership application, then both your health will be taken into consideration to determine how much equity you are allowed to release from your home.

2. The value of your property

The value of your property also influences how much equity you are allowed to release from your home. For example, if your property is worth more then you will typically be allowed to release a higher percentage of equity from your home.

Most lenders accept most house values, but some lenders are better at dealing with houses worth over one million pounds than others. It pays to do your research so make sure that you speak to your equity release advisor if your property is worth more than one million pounds.

3. How much of your mortgage you have paid off

As discussed above on this page, in order to qualify for an equity release loan you need to have already paid off a large amount of your pre-existing and traditional mortgage. The more you have left on your mortgage then the less money you are allowed to release from your home.

Please call our 24-Hour Helpline: 0330 058 1579

Is There a Minimum Amount of Equity I Can Release?

Whilst there is a set maximum amount when it comes to how much equity you are allowed to release from your home, there isn’t always a set minimum when it comes to equity release in Basingstoke.

This is usually because equity release lenders are only generally interested in people who want to release a significant amount of money from their home, as the more the client releases from their home, the more profit that they receive.

However, there are some lenders out there who do understand that some people might want access to their equity but only want a small amount so that they do not rack up a lot of unnecessary interest.

This is why some lenders do allow you to release approximately 10% of the total value of your home, but usually no less.

It is crucial to remember that this 10% will not be taxed, so the figure that you see on your mortgage illustration will be the exact figure that is eventually sent to your bank account upon completion.

Please call our 24-Hour Helpline: 0330 058 1579

The Alternatives to Equity Release in Basingstoke Explained

If you have read this far, then you will have a good idea as to whether equity release in Basingstoke is for you or not.

Although there are many reasons why equity release in Basingstoke is a great thing, at Equity Release Warehouse we understand that equity release is not the best or only option for everyone.

Some of these alternatives to equity release in Basingstoke are great, and others might even be cheaper for you in the long or short term than equity release is.

At Equity Release Warehouse we are aware of this, and will never force you into choosing equity release in Basingstoke if there are cheaper and better alternatives out there for you and your family.

When weighing up what is best for you and your family, you will need to take into account your particular circumstances, including how much cash in the bank you currently have, what you want to spend your money on and how quickly you need access to this money.

Some of the alternatives to equity release are listed and explained below, and can be great options if you are looking for more cash day-to-day to help you to enjoy your retirement in comfort.

1. Means Tested Benefits

It is important to note at this stage, that if you opt for equity release in Basingstoke, then you will lose any current or future entitlement to means-tested benefits.

However, if you do not want to take out an equity release loan, then you should check to see if you are eligible for any means-tested benefits.

There are lots of different online tools you can use to check to see if you are eligible for any means-tested benefits across Basingstoke and the rest of the UK, one of which is available here [2].

2. Government Grants

You might also want to check to see if you are eligible for any grants from the Government. The Government in the UK provides a range of helpful grants to those who are currently enjoying retirement, which might help to reduce your monthly bills.

Another example of how the Government might be able to help is by not having to pay your TV licence once you are over a certain age.

If you think that you might be eligible for a government grant, then check online on Age UK’s website [3].

3. Create an income

At Equity Release Warehouse, we understand that not everyone wants to work through their retirement years. However, there are more ways than ever to create money, with a great option being starting your own business.

By returning to work and earning an income again, your family and loved ones will be cared for. By creating your own business, you will also have more control over your working hours and income.

4. Use your pension wisely

If you have a pension which will see you through retirement, then you are one of the lucky ones.

If you do have a significant pension, then we advise that you put it to good use. If you need help with the day-to-day but do not have your own private pension, then speak to the council about receiving pension credit [4].

5. Got a spare room?

If you have a spare room in your house but are struggling to live off of your income or pension, then you should consider renting out your spare room to a lodger.

Although this is not the best option for everyone, if you live alone then this could be the perfect solution for you.

The Government has even created their own Rent-a-Room scheme which allows people the chance to earn more money than ever by renting out their house. This scheme ensures that the first few thousands you earn from this will not be taxed [5].

If you are considering equity release in Basingstoke, then speak to our team at Equity Release Warehouse for more information.

Our team are on hand to guide you through the process from start to finish, and will never pressure you into taking out a loan.

The decision will always be entirely up to you, and our advisers will only ever provide you with the relevant and necessary information to help to inform and support you.

Please call our 24-Hour Helpline: 0330 058 1579

References

[1] https://www.google.co.uk/books/edition/THE_MEANINGFUL_MONEY_HANDBOOK/Jv9qDwAAQBAJ

[2] https://www.gov.uk/benefits-calculators

[3] https://www.ageuk.org.uk/information-advice/money-legal/benefits-entitlements/

[4] https://www.gov.uk/pension-credit

[5] Rent a room in your home https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

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