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Equity Release in Derby - Lifetime Mortgage Near Me

Lifetime Mortgage & General Equity Release Advice in Derby
Reviewed by Tom Philips

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Equity Release in Derby & Near Derby

Equity release in Derby is essentially another type of loan or mortgage, that allows homeowners over the age of 55 the opportunity to release equity and money from their home without having to sell up and move.

You get to an age where moving house simply is not an option. But what happens when you’re tight for cash?

Instead of being forced to sell up and move, equity release in Derby allows you the chance to gain access to the money inside your home, whilst being able to remain living in your home for as long as you want.

Not only that, but you’re also free to spend the money that you receive on whatever you want [1].

The best thing about equity release in Derby is that you do not have to repay the loan until you move into a care home or pass away.

When this happens, your home will be sold and the loan repaid. This means that you do not have to worry about monthly repayments.

You will be charged interest on your equity release mortgage, either a monthly or yearly basis. You have the opportunity to pay off this interest as you go [1].

Once you pass away, your family and next of kin will be responsible for selling off your home and using the proceeds from the sale of the home to repay the loan. They will have 6 months to do this [1].

Please call our 24-Hour Helpline in Derby: 0330 058 1579

House prices in Derby

Buying a house in Derby is a great investment. If you bought a house in Derby a few years ago, then you might have noticed your house price increase in value.

Derby is a great commuter town, with great views of the countryside and historic connections and stories.

According to Rightmove, the average house in Derbyshire is valued at approximately £232,212.

Since 2018, house prices in Derbyshire have increased in value over 9%.

This means that a number of residents in Derby have experienced an increase in value over recent years, meaning that they will now be able to sell their property for a lot more than they bought it for [2].

This is music to most people’s ears, but especially those who are considering selling up or applying for equity release in Derby.

If your house increases in value for the duration of your equity release loan, then not only will you be able to pay back your loan in full after you pass away and sell the property, but you might also have some money left over to go to your loved ones as inheritance.

Please call our 24-Hour Helpline in Derby: 0330 058 1579

Lifetime Mortgages in Derby

Lifetime mortgages are by far the most popular type of equity release in Derby and across the rest of the UK.

They allow you to release a tax-free amount of money from your home, without ever having to leave. You have to pay interest on this loan, although it doesn’t need to be repaid until after you pass away or move into a care home.

You can only apply for a lifetime mortgage if you are aged 55 or over, own your own property in the UK worth at least £70,000 and own a property made out of traditional materials.

Home Reversion Plans in Derby

Home reversion plans are the second most popular type of equity release in Derby.

With this type of equity release plan, you have to sell a percentage of your property to your chosen lender, in exchange for a percentage of the value of your home as equity release.

Whilst you do not pay interest on this loan, you do have to sell a percentage of your property to your lender for less than the market value.

You have to be aged at least 65 or over in order to apply for a home reversion plan in Derby and have to own your own home in the UK worth at least £70,000.

Please call our 24-Hour Helpline in Derby: 0330 058 1579

What do you need to know before considering equity release?

If you are considering taking out equity release in Derby, then there are a number of things that you will need to consider before officially applying for a loan.

You should only be able to apply for an equity release loan if you have spoken to an equity release adviser and sought advice and support from a qualified solicitor who specialises in all things equity release in Derby [3].

1. You do not have to repay the loan until after you pass away

The best thing about taking out equity release in Derby is that you do not have to repay the loan until after you pass away, or alternatively move into a care home.

This is a great option compared to alternatives such as applying for a personal or bank loan.

It is however important to remember that once you pass away, your home will need to be vacated and sold and the loan repaid through the proceeds of the sale.

This means that your property will not be able to go to your loved ones as inheritance.

Please call our 24-Hour Helpline in Derby: 0330 058 1579

2. You will pay interest on your loan if you opt for a lifetime mortgage

Whilst you do not need to pay the loan back until after you pass away, you will be charged interest on your loan each year that your loan continues.

This is important to note, as your loan will most likely continue for a number of years, as the loan only technically ends once you pass away or move into a care home.

This means that you will be charged compound interest, which will significantly affect the overall loan amount.

Fear not, as all interest rates are fixed when it comes to equity release in Derby.

This means that your interest rate will stay the same for the duration of your equity release loan, instead of fluctuating every few years.

This means that you will know exactly how much you will need to repay year on year, as it’s easy to work out compound interest when your interest rate is fixed.

Please call our 24-Hour Helpline in Derby: 0330 058 1579

3. You can choose between a lump sum and drawdown plan

When you opt for equity release in Derby, you will get to choose between a lump sum or a drawdown plan. The difference between these two types of plans is how you want to receive your money and when.

Lump sum plans allow you to gain access to your money all at once, in one large lump sum. This will usually be a very large, tax-free amount.

You are free to spend this money on whatever you want, including helping your grandchildren with further education, helping them to put down a deposit on a home or alternatively making some home improvements around your house.

Alternatively, you can opt for a drawdown plan. A drawdown plan allows you to release money from your home in small, frequent payments into your bank account.

This way, you will be charged less interest and will receive monthly or annual payments, which could act as a nice top up to your pension or income.

You are still able to spend your equity release money on whatever you want, including further education for family members or home improvements.

It is important to talk to your equity release advisor during the early stages of your application about what you want to spend your money on. This is so that they can place you on the right scheme for you and your personal circumstances.

Please call our 24-Hour Helpline in Derby: 0330 058 1579

4. You will benefit from a no negative equity guarantee

There are lots of myths and misconceptions surrounding equity release in Derby and the rest of the UK.

One of these myths and misconceptions is that if your home decreases in value for the duration of your loan and no longer covers the loan amount, then your family will be left responsible for paying off any shortfalls.

However, this is simply not the case. According to the standards and values of the Equity Release Council, each equity release loan in Derby and the rest of the UK must benefit from the no negative equity guarantee.

The no negative equity guarantee ensures that even if your home decreases in value significantly during your loan, your loved ones and next of kin will never be responsible for paying off any of the loan. Instead, your lender finds themselves responsible should this happen.

What can equity release in Derby be used for?

The money that homeowners are able to receive from equity release in Derby can be used in a number of different ways.

Most people who opt for equity release in Derby end up spending their funds on improving their lifestyle as they enter retirement.

If this pension is unable to cover their lifestyle, then equity release might be a good way of topping up your income and savings during your retirement [4].

Some people spend the money they receive on their family and friends, to help them with paying off student loans, paying for house deposits and paying off mortgages.

Alternatively, some people choose to spend the money that they receive on making some home improvements around the house [4].

Afterall, it is likely that you will end up living in your home until you pass away. You might choose to redo your kitchen or bathrooms, to make them more accessible for you as you grow older.

Please call our 24-Hour Helpline in Derby: 0330 058 1579

Advantages of equity release in Derby

There are numerous advantages to taking out equity release in Derby. Whilst there are numerous advantages, it is important to remember that equity release in Derby is not for everyone.

If you receive means-tested benefits, then these will subsequently stop if you apply and are approved for an equity release loan.

If you are considering equity release in Derby, talk to an equity release adviser and specialist first.

They will be able to use their own equity release calculator and talk you through all of the advantages and disadvantages of equity release, some of which are listed below:

  • You will receive a tax free amount money
  • You will never be asked to move home or downsize
  • You are free to spend the money on whatever you want
  • You do not need to repay the loan until after you pass away or move into care
  • You will benefit from a no negative equity guarantee
  • You are able to decide between a lump sum plan or a drawdown plan

If you want more information on equity release in Derby, then speak to a member of our team at Equity Release Warehouse.

References

[1] https://www.halifax.co.uk/mortgages/equity-release-mortgages/how-does-equity-release-work.html

[2] https://www.rightmove.co.uk/house-prices/derby.html

[3] https://www.moneysavingexpert.com/mortgages/equity-release/

[4] https://www.aviva.co.uk/retirement/equity-release/knowledge-centre/what-can-you-use-equity-release-for/

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