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Equity Release in Gloucestershire

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Equity Release in Gloucestershire

Unfortunately, millions of people across the UK and Gloucestershire are currently struggling with the increase in the cost of living.

If you live in Gloucestershire, then you might want to consider equity release in Gloucestershire to help you to tackle the current cost of living crisis.

Unfortunately, the cost of living has been rising since early 2021, after the effects of the 2020 Covid-19 pandemic. Inflation is now at its highest, and millions of people across Gloucestershire and the rest of the UK are now struggling to keep up with the ever increasing costs.

Energy costs, consumer prices and inflation are all set to rise even more in the coming months, with millions of people across the UK worried about the effect this will have on their livelihoods.

If you are worried about the cost of living, then the Department for Work and Pensions have released guidance on what you can do to tackle the rising costs [1].

According to the consumer regulator Ofgem [2], gas prices have seen a record increase, with the price gap rising by 54% in just one year.

In addition to this, individuals who are on default tariffs will see their direct debit increase from approximately £693 to £1,277, and even to £1,971 every year. For many families across Gloucestershire, this is incredibly worrying [2].

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If you are aged 55 or over, retired and are struggling with the increase in the cost of living, then speak to a member of the Equity Release Warehouse team for advice and support on equity release in Gloucestershire.

When you release equity from your home, you are able to spend the money in many different ways. Some people choose to spend the money on themselves, their home or their loved one and family members.

Some people use the money they get from their equity release to pay off any existing debts, to fund any home improvements or to help Grandchildren with University fees or a deposit on a house.

If you live in Gloucestershire and are considering equity release in Gloucestershire, then speak to a member of our team at Equity Release Warehouse for advice and support on how to get started.

What is Equity Release?

If you are considering equity release in Gloucestershire, then it is important that you have a strong understanding of exactly what equity release is before you enter a plan.

Equity is the total value of your home, which includes your initial deposit, any monthly mortgage repayments that you have made over the years and also takes into account the total market value of your home.

Unfortunately, these figures are prone to fluctuating across Gloucester and the rest of the UK. As you would have bought your own home, you will be well aware of just how temperamental the housing and property market can be.

The market value of your home can move up and down, depending on the property market in your area.

However, if you have bought a property then you will be well aware that property value tends to increase over time, despite temporary lulls.

If you are considering equity release in Gloucestershire, then you should view equity as the following.

  • Equity is the market value of your home, minus the total mortgage left to repay on the property
  • Your monthly mortgage repayments are included in the equity
  • Your initial deposit is included in the equity
  • If you out down a smaller initial deposit, then your mortgage will be larger as will your monthly mortgage repayments

Most people across Gloucestershire are only ever able to put down a 10% deposit on their home.

If so, then your mortgage repayments will be higher, and the lender will charge more interest which can slowly turn into compound interest.

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For most people, their mortgage spans over 25 – 35 years, and every month their monthly repayments will include interest.

Equity release is when you release some of the money you have been putting into your home back into your pocket. For people who have lived in the same home over years, this can add up to a considerable amount of money and equity.

Equity release in Gloucestershire is something you should consider later in life, when you have built up enough equity in your home to warrant equity release.

You will only be considered for equity release if you are aged 55 or over, and have paid off a large sum of your mortgage.

In order to guide you through the process, everyone should contact an equity release specialist before they sign up to an equity release plan. An equity release advisor will be able to highlight any potential issues, as well as find out how much equity you are entitled to.

There are many different types of equity release schemes in Gloucestershire, and your equity release specialist will be able to talk you through them, one by one.

It is normal for an equity release specialist to ask you a number of different questions about your home, including who your mortgage provider is, and whether you are currently in any debt or whether you receive any benefits.

It is also normal for your equity release specialist to ask you what you plan on doing with the equity you receive. This is so that they can ensure that you are making a wise and sensible investment and decision.

At Equity Release Warehouse, our advisors have your best interests at heart. They will talk you through all of the available options for you and your family, and will not put any pressure on you to make a decision.

If you are considering equity release in Gloucestershire but simply do not know where to start, then speak to Equity Release Warehouse for advice on how to get started.

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Lifetime Mortgage

If you are considering equity release in Gloucestershire, then you might be considered for a lifetime mortgage. A lifetime mortgage equity release plan is the most popular form of equity release in Gloucestershire.

A lifetime mortgage is tax free, and you do not have to repay anything unless you pass away or move into long term care. In the meantime, you are able to remain living in your own home, or you can move home if you ever need to.

In order to qualify for a lifetime mortgage equity release plan, you will need to be aged 55 or over, and will need to own your own home in the UK that is worth more than £70,000.

There are two different ways you are able to receive your equity release. Some people opt to receive their money in one lump sum, and others also opt to receive their money in monthly, smaller payments.

There is no denying the fact that a lifetime mortgage is the most popular equity release plan across Gloucestershire.

Lots of people who opt for one lump sum use this money to help with any home improvements, a holiday or to help out a loved one with the cost of University or a house deposit.

If you opt for a lifetime mortgage equity release plan, you will also benefit from inheritance protection. This means that part of the value of your home will be passed on to your loved one or next of kin when you come to sell.

This inheritance protection plan will be offered as an additional option to your plan.

Equity release in Gloucestershire also benefits from a no negative equity guarantee. This means that all equity plans in Gloucestershire ensure that you will never have to pay more than the value of your property, even if you sell your property for a lesser amount.

If you are considering equity release in Gloucestershire, then you might benefit from a lifetime mortgage plan. Speak to a member of our Equity Release Warehouse team to find out more.

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Home Reversion Plan

Another form of equity release is a home reversion plan. This option allows you to sell part of your home to a lender in exchange for access to your equity. In return for a percentage of your home, you will receive either a lump sum or monthly payments form the lender, depending on what you opt for.

It is important to understand that if you opt for a home reversion plan, you will only ever get approximately 30% – 60% of the current market value of your home.

This means that if you opt for a home reversion plan, you will never make as much as you would if you were to sell your house on the housing market.

Under a home reversion plan, you will be able to remain living at your home until you pass away or move into long term care. Is important that you most likely will not need to pay any rent whilst doing so.

In order to qualify for a home reversion plan, you will need to be aged 65 or over and own a home worth more than £70,000.

It is also important to consider that with either a lifetime mortgage or a home reversion plan, whether you qualify will depend on your health. In order to qualify, you will need to be in good health.

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Why Do People Consider Equity Release in Gloucestershire?

Millions of people across the UK are releasing equity from their homes. Whilst each situation is different, there are a few different reasons people release equity from their homes.

For example, some people choose to release equity from their homes because they are struggling with an increase in the cost of living.

Others choose to release equity because they want to increase the value of their property by undertaking a series of home improvements, such as extensions or renovations.

It is important to understand that a lot of people aged 55 or over simply do not want to move home. This is not only because their house holds lots of memories for them, but because of the hassle and stress of moving house.

For this reason, equity release is the perfect solution, as equity release in Gloucestershire allows people to remain living in their own home whilst benefiting from additional income and savings without having to sell their home.

Others opt for equity release in Gloucestershire because they want to stay close to friends and family members, but want to be able to help their loved ones financially.

For example, lots of people aged 55 or over choose to spend their equity release on helping their children or grandchildren with education fees or property investment.

The reality is that there are lots of different reasons people consider equity release in Gloucestershire.

It is important to understand that it is normal for your equity release specialist to ask you what your reasons for considering equity release in Gloucestershire are.

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The Disadvantages to Equity Release in Gloucestershire

The main disadvantage of equity release in Gloucestershire is that you do not receive the full market value of your own home if you opt for a home reversion plan or a lifetime mortgage plan.

You will receive less money than you would if you were to put your property on the housing market. However, for many people aged 55 or over, moving house simply isn’t an option.

It is also important to understand that with equity release in Gloucestershire, the amount of inheritance your next of kin will receive might be reduced, but this does very much depend on what type of equity release plan you opt for.

What Does Equity Release Cost?

Taking out an equity release plan can cost some money. Unfortunately, this can cost anywhere between a couple of hundred pounds to a couple of thousand pounds, depending on what kind of plan you opt for and the support you need throughout the process.

For example, some people who opt for equity release in Gloucestershire opt to make back the interest on the plan on a monthly basis, whilst some others opt to allow this interest to compound and add it to the final cost.

If you opt for an equity release plan, then you will also have to pay for someone from the lender to come to value your property, so that they can make a fair and up-to-date assessment of the value of your home.

There will also be considerable legal fees associated with your equity release plan, as your solicitor will be responsible for liaising with the lender and drafting all contracts and agreements.

It is important that individuals consider these initial set-up costs when they consider an equity release plan.

If you are considering equity release in Gloucestershire but are worried about the set-up costs, then speak to a member of the Equity Release Warehouse team for advice and support on the costs of equity release. Our equity release calculator will help you to make the right financial decisions for you.

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How Do You Know if Equity Release in Gloucestershire is Right for You?

There are a number of factors and criteria that you will need to meet if you want to qualify for equity release in Gloucestershire. These factors include the following.

  • You have to be aged 55 or over for some schemes, and 65 or over for other schemes
  • You need to own your own property in the UK
  • This property also needs to be worth £70,000 or more
  • You need to have built up a lot of equity in the property

Before you speak to a solicitor or lender about equity release in Gloucestershire, you should speak with an equity release advisor to make sure that you are eligible.

There might be certain aspects of your financial situation that means that you either aren’t eligible for equity release in Gloucestershire, or that means that you might have to pay more.

You also need to consider how equity release will impact your loved ones and next of kins, which your advisor will also encourage.

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Questions to Ask Your Equity Release Adviser in Gloucestershire

If you are considering equity release in Gloucestershire, then there are a number of questions to ask your equity release specialist before you make your final decision. Some of these questions include the following.

  • Do I qualify for equity release in Gloucestershire?
  • What conditions need to be in place if I should ever want to move home in the future?
  • How will I pay back the interest?
  • Will an equity release scheme impact any benefits I currently benefit from?
  • How long am I allowed to stay in the house for?
  • How does inheritance work when you take out an equity release scheme?
  • What if I live with another person who does not own the property, like a child or a parent?
  • What happens if my tenant in common is aged under 55 years old?
  • What if I currently suffer from a health issue?

If you have more questions to ask your equity release advisor, then speak to a member of the Equity Release Warehouse team for insight and support.

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Can I Still Rent Out My House if I opt for an Equity Release Plan?

Lots of people also want to know if they are still able to rent out their house in the future, if they are to opt for equity release in Gloucestershire.

Whilst over 70% of people who are retired in the UK own their own home with built up equity, a lot of people aged 55 or over are currently struggling with their income and the rising cost of living.

For this reason, some homeowners might also want to rent out their house as an additional form of income.

However, with some equity release plans in Gloucestershire, the flexibility to do so might be limited. This is why it is always important to be open with your equity release advisor about what you want to spend the money on, as this will impact what schemes you should and shouldn’t opt for.

For example, if you are planning on renting out your home, or use the plan for a second home, then you will need to opt for a certain equity release plan and will need to closely follow the rules and limitations of that specific equity release plan.

If you genuinely do not know what you want to use the equity money for, then you should always opt for a more general equity release planHowever, you should always talk with your equity release advisor before doing so.

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Will I be Charged for Any Early Repayment Charges on Equity Release in Gloucestershire?

When it comes to early repayments under an equity release plan, this is at times a complicated question which depends on a number of different factors.

There are a whole host of reasons why someone might want to repay their equity release loan back early. Generally, a lot of people tend to avoid this so that they can enjoy their equity release there and then.

However, people will choose to repay their loan back early for a number of different reasons. For example, some people receive another form of income (such as inheritance) and decide to use the money in a sensible way.

You might also want to downsize or move home, without having to transfer your equity release loan to the new property.

If you decide that you want to repay your equity release loan back early, then there is a chance that you might be charged for some penalties, depending on who your plan is with.

For example, across the lenders, most lifetime mortgages incur an early repayment fine that can cost a significant amount of money. For some plans, this can cost as much as 25% of the total amount that you have borrowed.

If you are considering paying back your loan early, then you will need to make this clear to your equity release advisor so that they can avoid picking a plan with a 25% repayment charge.

You should always ask your lender and your advisor what you would be charged if you were to repay your equity release loan early.

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Get in Touch with Equity Release Warehouse

If you require more information on equity release in Gloucestershire, then speak to a member of our team at Equity Release Warehouse on 0330 058 1579 for advice and support. Alternatively, you can contact us online for a free call back from one of our specialists.

Our friendly and helpful team is able to guide you through the process of equity release step by step, until you are confident and comfortable enough to make an informed decision.

References

[1] https://www.gov.uk/guidance/cost-of-living-payment

[2] https://www.ofgem.gov.uk/publications/price-cap-increase-ps693-april

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