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Lifetime Mortgage & General Equity Release Advice in Chelmsford
Reviewed by Tom Philips
Get in touch today on 0330 058 1579 for a free, zero obligation consultation. We can help you locate equity release advisors in your local area.
When you speak to an equity release Chelmsford adviser, they will explain that there are many different types of equity release in Chelmsford.
The one you are most likely to have heard of is the equity release in Chelmsford lifetime mortgage.
However, there is not just one type of lifetime mortgage, so you may not be familiar with all eight plans.
The eight lifetime mortgages are:
As well as the lifetime mortgage, some equity release in Chelmsford providers offer home reversion plans.
Lifetime mortgages require the equity release in Chelmsford customer to apply to a lender, receive funds from their residential property, and live off these funds while staying in their home.
For a home reversion plan, the customer must sell part of their home to the provider, but they also remain in the home after doing this.
If you have a conventional mortgage, you have to repay the loan on a monthly basis, according to the mortgage deal that has been agreed by your mortgage lender.
If you have a variable interest rate, the interest will change as the economy changes. Fixed interest rates mean that you will pay the same amount within a set time, regardless of how much interest other mortgage providers are charging.
With equity release Chelmsford, there are generally no monthly repayments. Customers receive their loan without being expected to pay it back, as it is paid back when they pass away.
They will still either have a fixed or variable interest rate, but it won’t affect them as much as it affects people with traditional mortgages.
If they find themselves struggling with money, they can trust that their mortgage provider won’t demand the borrowed funds to be repaid.
Compound interest is unique to equity release in Chelmsford; all interest debt accumulates year on year.
This is one of the drawbacks of equity release, although it still doesn’t result in customers getting into irreversible debt, as the interest does not have to be repaid.
If you currently have a traditional mortgage that you aren’t happy with, you can pay it off using an equity release in Chelmsford loan (1). Don’t let your conventional mortgage stop you from enquiring about equity release plans.
Below, we outline some of the advantages and potential pitfalls of equity release:
Equity release in Chelmsford has plenty of benefits for certain homeowners. To begin with, it provides an opportunity to borrow money without leaving your home.
For people heading towards retirement, being able to stay in their current home can be the biggest draw of equity release.
The financial value of equity release in Chelmsford is another huge advantage. The average loan-to-value (LTV) ratio is between 20-60%, so if you are in a high-value home, you could take out a huge amount of money from your property.
There are no essential repayments with equity release in Chelmsford. Even if you spend all of the funds and you can’t afford to repay the debt, it isn’t an issue.
As customers offer up their home in return for the loan, the debt is cancelled out when the equity release in Chelmsford provider sells the property.
This never happens while the homeowner is still living at home. It occurs when they go into residential care or pass away.
Some people find that equity release in Chelmsford lands them in a better position when it comes to inheritance tax.
As they are less likely to need to pay inheritance tax (due to reducing the value of their estate), their family members get access to more of their funds when they pass away.
When people want to give financial gifts to family, equity release in Chelmsford is one of the best schemes for doing so.
As you can access such large amounts of money that doesn’t need to be repaid, it’s a great long-term solution for significant financial problems.
In order to become an equity release in Chelmsford consumer, you need to agree to the rules and principles.
Although there is an element of flexibility, it may become harder to do things like move home, repay part of the loan, and leave a large inheritance.
Equity release in Chelmsford is not like short-term schemes in the sense that it doesn’t end until the last homeowner dies or enters long-term care.
Some people feel that this is too big of a commitment, as they may change their mind a few years after getting equity release in Chelmsford.
One element of equity release in Chelmsford that people often struggle with is compound interest. The interest adds up rapidly, and even though it doesn’t need to be repaid, it can be overwhelming.
Finally, equity release in Chelmsford is only possible for people who meet the eligibility criteria.
This mainly consists of owning a home worth at least £70,000 and being 55 years or older, but there are further requirements for different equity release companies.
Work out how much money you could get with equity release in Chelmsford using our free equity release calculator.
Generally, you access more money if your property is highly valuable (people with houses tend to get more than people with apartments) and you are on the older end of the equity release age scale (which starts from 55 years old).
It’s important to research the different equity release in Chelmsford plans as you may find a specific plan that allows you to release more money.
People with specific illnesses and/or people who are considered elderly may be able to release more money through the enhanced/ill-health lifetime mortgage.
First, check that you’re eligible for equity release in Chelmsford. It’s recommended to meet with an equity release specialist to do this, as you need to meet with one at some stage in order to qualify for the scheme.
With the help of an expert, you can apply for equity release in Chelmsford as soon as you have decided which product you would like.
Equity release advisers will present a personalised illustration that helps you to figure out what your needs are, and find out which products meet your needs.
If you are currently too young for equity release, you need to wait until you reach the minimum age requirement of 55 years old before you can apply. However, there’s no harm in looking into the scheme before you commit to it.
The equity release in Chelmsford conveyancing process begins with finding a solicitor who is qualified to work with equity release and is regulated by an official equity release regulator (such as the Financial Conduct Authority and the Solicitors Regulation Authority.
The solicitor will discuss the legalities of equity release in Chelmsford. At this stage, if there are any potential legal issues in your application, they will highlight them.
If you are eligible for equity release, they will open a case file for you and provide you with a unique reference number.
You will also have to fill out an equity release in Chelmsford questionnaire to provide the solicitor with more information about your case. In return, you will get a welcome pack that will answer many of your burning questions.
Next, the equity release in Chelmsford solicitor needs to check the title deeds of your house or apartment to confirm that it is suitable for equity release.
Part of this check includes investigating outstanding mortgage debt – if you have a conventional mortgage that you cannot pay off, you will not be able to get equity release in Chelmsford.
There is no one stopping you from spending the full equity release in Chelmsford loan. If this happens, you will still be able to access financial help (e.g., state benefits), and your house will remain your own.
However, it goes without saying that we wouldn’t recommend spending the full loan if you don’t have another means of income.
This would only be appropriate if an equity release in Chelmsford customer had plenty of savings (e.g., income from pensions, savings accounts or inheritance) and had a specific reason to spend the entire loan e.g., purchasing a second home.
If your equity release in Chelmsford lender is regulated by the Equity Release Council (ERC), they are obligated to allow you to move into a ‘suitable alternative property’.
This means you cannot simply choose a new home to move into – it must be approved by the company.
Unregulated lenders don’t have to allow their customers to move house. The customer may have to pay a large early repayment fee in order to exit the equity release in Chelmsford scheme and move into the new property.
This is a simple answer: you can only trust regulated lenders.
A large number of equity release in Chelmsford companies are regulated, including:
Find an equity release in Chelmsford provider that is regulated by the ERC if you want total assurance that you will have a no negative equity guarantee.
This guarantee means that no matter how much of your loan is spent, you and your family will not have to top up the money that goes to the provider at the end of the scheme.
All they will do is sell the property and take the funds that they are owed based on how much money was borrowed to begin with.
In other words, the compound interest debt will not disadvantage the equity release in Chelmsford consumer or their loved ones.
It’s ideal for both members of a couple to agree on equity release in Chelmsford. If not, the situation can become unfortunate when one member of the couple passes away or goes into long-term care.
The person who did not agree to equity release in Chelmsford would have to leave the home in this scenario.
On the other hand, if it is this individual that dies first or goes into care first, the person with their name signed on the lifetime mortgage can continue to live in the home.
It’s always recommended to explore the alternatives to equity release in Chelmsford if you and your partner cannot agree.
Perhaps you could both agree to downsize, get traditional loans or remortgage the home in favour of releasing equity.
As you do your research, keep in mind that each of these alternative choices comes with disadvantages. There is no retirement scheme that is perfect in every way.
Yes, this is known as inheritance protection, and it is something many equity release in Chelmsford customers choose to do. Both lifetime mortgage and home reversion customers can set aside money for inheritance.
Not every equity release in Chelmsford provider lets you do this, so make sure you ask this question before committing to a specific equity release product.
We offer impartial advice on equity release on a daily basis. When it comes to equity release in Chelmsford queries, there’s nothing we can’t handle.
Call us today on 0330 058 1579 to test this for yourself. We offer a free initial telephone appointment which is the perfect opportunity for you to ask all the questions you have about equity release in Chelmsford.
Get help now across Chelmsford in Galleywood, Bicknacre, East, West and South Hanningfield, Boreham, Ford End, Pleshey, Highwood and Good Easter.
[1] The best equity release interest rates https://www.thetimes.co.uk/money-mentor/article/the-best-equity-release-interest-rates/
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