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Equity Release in Bromley

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Equity Release in Bromley

Equity release in Bromley is an easy way of gaining access to the equity that has built up in your home over the number of years that you have lived there.

You release money from your home which you will pay back to your lender when you pass away or move into long-term care.

In the meantime, you will pay interest on the equity release loan which you can either pay back each month or you can allow this interest to compound and grow, which will need to be paid back when your next of kin comes to sell your house after you pass away.

You can either release one large, tax-free lump sum from your property or you can ask to receive smaller payments each month.

This will very much depend on what you plan on spending your equity release money on. The good news is that there aren’t many limits to what you can spend this money on.

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For example, you can choose to spend your equity release money in Bromley on yourself, on your home or on loved ones.

Lots of people choose to spend their money on helping their children or grandchildren with any financial commitments, such as University fees or a house deposit.

The other fantastic thing about equity release in Bromley is that you are given a fixed interest rate.

Unlike regular mortgages, the amount of interest you pay on your equity release loan will stay the same throughout the entirety of your loan. This means that you will know from the offset how much you will have to repay.

When you come to sell your property, your next of kin and family will liaise with the equity release lender to ensure that the loan and any added interest on that loan is paid back when the house is sold.

Depending on your age and current health, as well as how much equity you want to release from your house, individuals are usually able to release anywhere between 60% and 70% of the total value of their home, which can be a significant amount of money for some people.

There are also limits to the minimum amount of equity that you are able to release from your home, which is usually around 10% of the total value of your property depending on your age and your current health.

There are two main types of equity release in Bromley, which are used throughout the rest of the UK. These two types of equity release are known throughout the UK as lifetime mortgages and home reversion plans. Both are fantastic ways of releasing equity from your home, but both have their own pros and cons.

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Advantages of Equity Release in Bromley

At Equity Release Warehouse, we feel passionate about the advantages of equity release.

When you speak with one of our advisors, they will be able to talk you through the benefits of equity release, including the differences between the types of equity release, including lifetime mortgages and home reversion plans.

One of the biggest benefits of equity release in Bromley is that there aren’t any real limits on how you want to spend the equity release money.

You are pretty much free to spend the money however you want to. However, lots of people are wise and choose to spend their equity release on increasing the value of their house for their next of kin.

Ways of doing this include spending your equity release money on home improvements or extensions.

You can also choose to gain access to your equity release funds in a number of different ways. For example, you can ask your equity release lender to send you your money in a one-off payment, as one large lump sum.

However, you are also able to ask your lender to send you smaller monthly payments, or can ask for a combination of the two.

Remember, you do not have to repay your equity release loan until after you pass away or move into long-term care.

All equity release plans across Bromley are standardised by the Equity Release Council and Financial Conduct Authority, which means that each equity release plan and lender have to include a no negative equity guarantee as part of their loan.

This means that your next of kin will be protected if your property sells for less money than the loan you took out.

Your next of kin will never be left in debt as a consequence of your equity release loan, as the lender will be liable to pay the difference.

You will also be able to add inheritance protection to your equity release loan. This means that a large part of your next of kin’s inheritance will be protected.

It is important to remember that you will remain the sole owner of your property during your equity release loan, and are therefore responsible for the maintenance of your property and its grounds.

Most people think that they are too young to take out an equity release loan in Bromley. However, individuals aged 55 years old or over are now able to take out a range of different equity release loans across the UK.

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Disadvantages of Equity Release in Bromley

Although there are a lot of benefits when it comes to equity release in Bromley, there are also a few disadvantages to equity release in Bromley that you will need to accept and fully understand if you are considering equity release in Bromley.

For example, if you opt for equity release in Bromley and particularly a home reversion plan, then the amount of inheritance you will leave for your family, loved ones and next of kin will naturally be reduced.

This is particularly common if you do not pay off the interest on your equity release loan whilst you are still alive, as your next of kin will then have to use the money from the sale of the house to pay off this interest.

You must also understand that although the interest rates on your equity release plan will be fixed, the interest rates on equity release loans generally tend to be higher than they are with normal mortgages.

Although they are slightly higher, they are not unreasonable and as discussed, will be fixed for the duration of your loan.

You must remember that the nature of your equity release plan is long-term, which will naturally affect the interest rate of your loan.

One of the biggest negatives behind equity release in Bromley is that the interest on your loan will quickly build up into compound interest if ignored.

This is why most equity release specialists and advisors will recommend that you pay off the interest on your equity release loan when you can, so that you can avoid this from happening.

If you currently qualify for any means-tested benefits, then you will need to discuss this with your equity release advisor and specialist.

This is because you might lose access to these benefits when you receive your equity release money, and will not be able to apply for them in the future, after you have taken out your equity release loan.

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How Much Equity Am I Able to Release?

How much equity you are able to release from your home depends on a long list of things that your equity release advisor will discuss with you.

For example, how much you are allowed to release depends heavily on how old you are, what the current value of your house is, how much of your pre-existing mortgage you have paid off already and how healthy you currently are.

If you suffer from any pre-existing health conditions then you might not qualify for equity release in Bromley altogether.

You are able to release anywhere between 60% – 70% of your home but no more, depending on your age.

Most people tend to release approximately 20% – 50% of the total value of their home. Depending on the value of your home, this could be anywhere between £10,00 and £250,000.

Many people find that they have a lot of equity in their home because they bought the house many years ago, and since then house prices have increased significantly,

In fact, in recent years house prices have increased dramatically, meaning that you would now be able to sell your house for a significant amount more than you bought it for just a few years ago.

If you are considering equity release in Bromley and are curious to know how much money you might be able to release from your home then speak to a member of Equity Release Warehouse.

Our team will be able to use our equity release calculator to work out the best equity release plan for you as well as how much you will potentially be able to release from your home.

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What Qualification Criteria Do I Need to Meet?

Each lender has its own qualification criteria when it comes to equity release in Bromley. However, there are some general criteria factors that you will need to meet in order to qualify for the majority of equity release plans.

Before you submit your final application to your lender, your equity release advisor will go through these qualification criteria with you and only recommend products to you that you will meet the criteria for.

Some of these qualification criteria factors include the following.

  • Whether you are aged 55 or over for a lifetime mortgage or 65 or over for a home reversion plan
  • Whether you own your own property in the UK
  • Whether your property in the UK is worth £70,000 or more
  • You need to have paid off a lot of your pre-existing mortgage already
  • You must currently be healthy

Your lender will also look into your credit score to ensure that you are able to repay your equity release loan over time.

Your lender will perform a credit score check on you during the application stage, and will investigate your credit history to a certain degree.

If you suffer from a poor credit score, this doesn’t necessarily mean that you won’t qualify for an equity release plan in Bromley.

If you are worried about your credit score and how this might affect your application for equity release in Bromley, then speak to your equity release advisor about this.

However, it is important to remember that if you have ever declared yourself bankrupt at any stage of your life, then there is a chance you might not qualify for equity release in Bromley or across the rest of the UK.

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Am I Allowed to Pay Back My Equity Release Early?

Whether you can or cannot pay back your equity release loan early is dependent on a number of different things and varies between loans and individuals.

People might choose to pay back their equity release loan early for lots of different reasons, including wanting to sell your house, because you have come into a significant amount of money which will allow you to do so or because you no longer want to continue with equity release.

However, the statistics show that once people release equity from their home they are unlikely to repay their loan back before they have to, as this is often taken care of when the individual passes away, as the sale of the home will generally always cover the cost of the loan.

Even if it does not cover the cost of the loan, your next of kin and family will never be liable to pay off this debt, as your equity release lender will be the one liable to pay off the difference.

Whether you are able to pay off your equity release loan early depends on what plan you choose.

Lifetime mortgages almost always allow people to pay back their loan early, and will include the opportunity for a voluntary repayment scheme without having to pay any early repayment fines or fees.

By doing so, you will no longer have to pay any interest on the equity release loan.

With lifetime mortgages, some plans and lenders allow total flexibility when it comes to paying off the equity release loan early, and will not create any due dates or deadlines.

Nevertheless, it is important to understand that there might be limits when it comes to how much you are able to pay off at once, and that you might need to wait a number of months or years after you have taken out the equity release loan before you might be able to pay back the loan early and ahead of schedule.

Some people choose to pay off the interest on their equity release loan early, instead of the loan amount. This is a great idea, as it will avoid the build-up of interest in compound interest.

If you wish to pay off the interest on your loan early, then you might want to choose an interest-only equity release loan and pay off the interest on your loan on a monthly or yearly basis.

If you think that you might want to pay off your loan early, whether that be the loan amount or the interest on your loan then speak to a member of our team at Equity Release Warehouse for advice and support on how to do this.

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Why Might I Want to Avoid Paying Back My Loan Early?

Many people might want to avoid paying back their loan early because it simply isn’t the way they want to spend their equity release money.

Many people are aware that if they continue paying just the interest on the equity release loan, then they will be better off financially in the long run, as will their next of kin.

For many people, there simply isn’t a need to pay off their equity release loan early.

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Set Up Costs When it Comes to Equity Release in Bromley

When you choose to release equity from your home, you will need to pay for a number of set up costs to get you sorted. This includes paying for an advisor, paying to send off your application, paying for a survey and any admin and legal fees.

When considering equity release, the first thing that you will need to do and pay for is advice from an equity release advisor as well as the help and expertise of a lawyer.

These can cost anywhere between £1,000 and £3,000 but usually tend to depend on the complexity and size of your equity release application.

Nevertheless, the cost of legal advice will very much depend on who you opt to go with, as some legal firms are a lot more expensive than others.

Another thing worth noting is that you will have to pay for a new valuation of your property, so that your lender and advisor have a clear and up-to-date picture of how much your house is worth.

It is also worth noting that if you choose a scheme where you think you might want to repay some fees early, then you might need to pay some early repayment costs.

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What If I Am in Debt?

Unfortunately, there will be hundreds if not thousands of people who live across Bromley who suffer from a significant amount of debt.

They might be in debt from credit cards or bank loans, and means that a lot of people suffer from a poor credit score as a result of their debt.

In fact, a recent study carried out by Age UK found that almost 50% of all individuals currently in work who are aged between 40 and 46 do not think that they will be able to afford to retire by the time they reach retirement age [1].

Unfortunately, lots of people who have a mortgage across Bromley and the rest of the UK find themselves struggling to even make their monthly mortgage repayments, and suffer from a range of different debts, both secured and unsecured.

The ONS (Office for National Statistics) recently carried out a study which revealed that an increasing number of people aged over 65 are now in debt [2].

In fact, there are approximately 1.65 million people aged 65 or over now in debt, with this number due to rise over the next few years [2]. With life expectancy continuing to rise, this creates a bleak and scary future.

Lots of people who suffer from debt and are aged 65 or over might consider equity release as a way of helping to pay off their debt. In fact, equity release in Bromley is a great way of doing this.

You are able to use your tax-free equity release money to pay off your debt, including credit card debt or bank loans [3].

At Equity Release Warehouse, we know that dealing with debt month in and month out can be exhausting and quite frankly, depressing. If you are currently suffering from debt, then speak to one of our advisors about releasing equity from your home in order to help.

Once you have paid off your debt, you will be free to enjoy your retirement however you want. In fact, you might even have some equity release leftover to live a more comfortable and exciting retirement.

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How Long Does Equity Release in Bromley Take To Process?

Equity release in Bromley takes approximately 8 – 10 weeks but this does depend a lot on how complicated and large your equity release is.

In order to understand why it takes so long, we have explained the equity release process below. There are a number of things that you can do within this process to help speed up how long each step takes, which is explained below.

1. Do Your Research First

Although it is not mandatory to do your research into equity release in Bromley before you apply for your equity release loan, it is recommended if you want to understand the equity release process and speed up the process when you can.

You should start by googling equity release in Bromley and should do your research where you can.

You should then get in touch with Equity Release Warehouse, where our advisors will be able to provide you with a more detailed insight into what equity release is, what schemes you might be eligible for, how much you will be able to release and how long the process will take.

You do not have to research for weeks and weeks before reaching out to an Equity Release Warehouse advisor. We do not expect you to know everything about equity release in Bromley before you speak to us.

Our equity release advisors are not there to test or question your knowledge, as they see it as their job to inform and educate you on the ins and outs of equity release in Bromley.

You should not be afraid of asking your Equity Release Warehouse advisor questions, as it is important that you fully understand the process and how equity release works before you take the plunge.

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2. Apply For Your Equity Release Loan

The next stage is to apply for your equity release loan. You will do this by applying with the help of your equity release advisor who will have already checked to make sure that you are eligible for the equity release loan that you are applying for.

Your advisor will help you to complete any forms or paperwork that your solicitor and lender has sent you. You can send off your equity release application in person or via email.

3. Get Your Property Valued

In order to work out how much your property is worth, then you will need to get your property valued by an official valuer from the lender. They will need to do this before they can offer you your equity release loan, so it is in your best interest to get this organised as quickly as possible.

Your house must be worth at least £70,000 or more in order to be considered for equity release in Bromley, and the valuer will need to visit the house (often both internally and externally) in order to assess how much your property is currently worth. The valuer will also look at the average house price on your street and the general area.

They will also look at your house for any damage or work needed, and will especially be on the lookout for any subsidence or damage to the roof.

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4. Accept Your Equity Release Offer

You might need to wait a few weeks before hearing back from your equity release advisor. Hopefully, it will be good news and you will be able to accept your equity release mortgage offer.

Once you have acknowledged receipt of this offer and have highlighted that you are happy to go ahead with it, then you will need to engage a solicitor to do all of the hard work for you.

5. Engage a Solicitor

As with any mortgages, you will need to engage a solicitor to handle a lot of the work for you, including any further communications with the equity release lender.

Your solicitor will make sure that everything is above board, and will take a thorough look through the contract they have been sent as well as the terms and conditions of your equity release offer. They will highlight any potential issues that they can see before the transaction goes ahead.

If they are happy, the lender is happy and you are happy, then you will be able to exchange contracts and sign on the dotted line.

6. Completion and Access to Your Funds

Once you have signed and exchanged contracts, you will then be given a date (usually approximately a few weeks away) when you will be sent your equity release funds.

Depending on the nature of your equity release loan, you will be sent either a lump sum or your first monthly payment.

From then onwards, you are then free to spend your equity release funds however you want to. You can choose to improve your home, get an extension or spend your money on a holiday or a loved one. The decision is entirely up to you!

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Get in Touch with Equity Release Warehouse

Equity release is a great way of giving yourself the retirement you always wanted.

By releasing equity from your home during your retirement, you are not only giving yourself the time to enjoy your life, but the funds as well.

If you are interested in equity release in Bromley, then you should speak to our team at Equity Release Warehouse.

Our team of friendly and professional advisors will talk you through the process and provide you with the knowledge and confidence you need to take the plunge and apply for equity release in Bromley.

References

[1] https://www.ageuk.org.uk/latest-press/articles/2017/october/not-enough-money-to-retire/

[2] https://www.ons.gov.uk

[3] https://www.elystandard.co.uk/lifestyle/property/equity-release-on-your-property-8203216

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