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Equity Release in Herefordshire

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Equity Release in Herefordshire

Lots of people across Herefordshire are currently struggling with the cost of living. If you are one of them, then you might want to consider equity release in Herefordshire.

There is no denying the fact that the cost of living has been steadily rising since 2021, with inflation the highest it has been in years.

With rising energy costs, consumer prices and inflation, families across Herefordshire are struggling more than ever.

In fact, the consumer regulator Ofgem has highlighted that the energy price cap has increased by 54%. As a result of this, people are struggling to keep up with direct debits and regular basis, as well as struggling to heat their home and afford the same weekly food shop that they once could afford.

If you have been struggling with the increase in cost of living recently, and are aged over 55, then you might want to consider equity release in Herefordshire.

The great thing about equity release is that individuals are able to spend their equity release however they want to. For example, some homeowners choose to spend their money on home improvements, retirement funds, any healthcare payments or to pay off debts.

However, with the cost of living increasing rapidly, with more increases due in October 2022, you should be responsible with your equity release and put some away for a rainy day.

If you live in Herefordshire and are worried about the cost of living, then speak to one of our advisors at Equity Release Warehouse for advice and support on how equity release in Herefordshire can help you through these difficult times.

Please call our 24-Hour Helpline: 0330 058 1579

What is Equity?

Lots of people simply do not understand what equity means. In order to understand equity release, individuals first need a good grasp on exactly what equity is.

Home equity is the total value of a property, including the owner’s interest and monthly mortgage payments.

This also includes the total market value of the property if you were to sell up, and the amount of money the homeowner has been paying into the house every month through their monthly mortgage repayments.

As with most things across property and finance, these factors fluctuate overtime. This very much depends on how the property market in your area is going, what interest rates are currently doing and a whole host of other factors.

However, most people who understand the property market, or who own a property, understand that for most people, the equity and value of their home does tend to increase over time, despite temporary lulls and fluctuations.

Below are a few easy to understand ways to think about equity release in Herefordshire.

  • Home equity includes the market value of the property, minus the total mortgage on the property
  • Your monthly mortgage payments (minus interest) also contribute to your equity
  • Your deposit is also included in the equity of your home
  • The smaller your deposit, the larger your mortgage and monthly repayments will be

For example, if you only put a 10% deposit down on your home, then the lender or bank will charge you interest until the loan has been paid back. For most people, this would take 35 or more years, depending on the price of the property.

Unfortunately, you will have to pay set interest rates in order to do this, which slowly compounds. This can result in a lot of compound interest very quickly.

If you are considering equity release in Herefordshire, then you should always speak to an equity release advisor before you release any equity from your home. Equity Release Warehouse is able to provide homeowners with the knowledge, insight and advice when it comes to equity release in Herefordshire.

Please call our 24-Hour Helpline: 0330 058 1579

What is Equity Release in Herefordshire?

Now that you have a grasp on exactly what equity is, you might want to consider equity release in Herefordshire.

Equity release is something you should start to think of as you get later in life. You should only be considering equity release in Herefordshire when you are aged 55 or over, own your own home and have a lot of equity build up in their home.

Equity release is when you decide to release some of the equity that has built up in your home, so that you gain access to this money.

The Financial Conduct Authority states that all equity release advisors need permissions to enter into a regulated mortgage contract with a lender. They also state that the two most popular forms of equity release plans are lifetime mortgages and home reversion plans [1].

If you think you would benefit from equity release in Herefordshire, then you need to speak with an equity release advisor first before you take any other steps. They will be able to advise you on a number of different things.

This includes which schemes would be best for you, what rates you would be on, and whether releasing equity from your home would impact any tax liabilities or benefits you currently have access to.

Your equity release specialists will also ask you a number of different questions about your home, your financial circumstances and they will also want to know what you plan on spending the money on.

This is solely because they have your best interests at heart, and want to make sure that you are making positive and safe investments.

If you are considering equity release in Herefordshire, then speak to our friendly, specialist team for advice and insight into the ins and outs of equity release.

Equity Release Warehouse advisors have your best interests at heart, and will only suggest options if they are right for you and your financial situation.

Equity Release Warehouse will not only provide you with advice on equity release in Herefordshire, but they will also act on your behalf when it comes to talking to any lenders, banks or solicitors.

Equity Release Warehouse pride themselves on not putting any pressure on you to release your equity. We simply provide you with the best, current options and let you decide in your own time.

If you are considering equity release in Herefordshire, then speak to a member of the Equity Release Warehouse team for advice and support on how to take the first steps to equity release in Herefordshire.

Please call our 24-Hour Helpline: 0330 058 1579

Who Qualifies for Equity Release?

If you want to release equity from your home in Herefordshire, then there are a number of qualification criteria you will have to meet in order to do so.

For example, if you want to qualify for a lifetime mortgage equity release scheme, then you will need to be at least 55 years old. However, if you opt for a home reversion plan then you will need to be aged 65 or over.

You must also own a property in the UK, which must be your main residence. In addition to this, you must have built up a significant amount of equity in your home, which usually means that you have lived in it for many years.

Your house must also be in a good or reasonable condition, which valuers will assess during the home valuation. The property must be worth more than £70,000 in order to qualify for equity release in Herefordshire.

If you have a mortgage on the property that you own, then you must have built up a significant amount of equity in the property over the years, but this will also depend on the total value of the property and the amount you put down as a deposit when you first bought the property years ago.

It is important to understand that if you opt for equity release in Herefordshire, and you still have a mortgage on the property then you will still need to continue to make payments on your property even if you have released equity.

It is also important to understand that if you have other people living with you, such as children, parents or friends, then you might not be suitable for equity release in Herefordshire.

If you do qualify whilst living with dependents, then it is important that they are taken into consideration during the process, and they might need to seek legal advice if you are to go ahead with the equity release plan.

If they choose to stay living in the house, then they might need to sign a waiver to confirm that they understand that they might not be able to stay living there if you die, or if you move into a care home for health reasons.

Please call our 24-Hour Helpline: 0330 058 1579

Lifetime Mortgage Plan

A lifetime mortgage plan is one of the most popular forms of equity release in Herefordshire. A lifetime mortgage is a form of equity release in Herefordshire, which is a form of mortgage that is secured against your home.

All money you gain access to through a lifetime mortgage plan will be tax free. You will also be able to remain in your home.

In order to qualify for a lifetime mortgage equity release plan, you will need to be aged over 55, and own a property in the UK worth more than £70,000 and in good condition.

The great thing about a lifetime mortgage equity release plan is that you do not have to repay anything until after you pass away, or move into a care home for ill health.

You will also be able to receive the money in one lump sum, or a series of smaller payments over a number of months or even years.

An equity release plan in Herefordshire is a great option. Whether you are wanting to pay off an existing mortgage, make some home improvements or help a family member and their financial situation, a lifetime mortgage might be the best option for you.

Below are some more benefits when it comes to a lifetime mortgage equity release plan in Herefordshire.

1. Spend the money however you want to

One of the great things about equity release in Herefordshire is that you are able to spend the money however you want to. Some people choose to spend their equity release in Herefordshire on home improvements, to increase the value of their property.

Others choose to spend their equity release on a holiday, a new car or to make their retirement years a bit more comfortable.

Some others choose to help their family members with the cost of living, or might choose to spend the money on a grandchild’s University fees or a deposit on a house.

2. There is nothing to repay

Unless you decide to pay back the interest on the equity release plan whilst you are still alive, then you do not have to pay back anything until after you die or move into a care home for an illness.

4. There are flexible repayments

You are able to repay some interest straight away, or you can opt to repay part of the original loan upfront, too. There are many different ways to choose from when you opt for equity release in Herefordshire.

Please call our 24-Hour Helpline: 0330 058 1579

5. You get to stay in your home for as long as you want

The best thing about equity release in Herefordshire is that you get to stay in your home for as long as you want, whilst gaining access to the equity and money that has built up in your home.

This way, individuals do not have to downsize or move away from friends, family or loved ones.

6. However, you can still move house if you wish

You are also able to move homes if you wish. However, the new property you buy must be accepted by your equity release lender.

7. You will benefit from inheritance protection

It is also important to understand that part of the value of your home can also be passed on to your loved ones and next of kin. This will be made available through the inheritance protection plan that will be offered to you by one of our equity release specialists.

8. No negative equity guarantee

Another great benefit of equity release in Herefordshire is that all equity release plans come with a no negative equity guarantee. This essentially means that you will never pay more than the value of your property when you come to sell it.

This includes even if you sell your house for a less amount than you own. This is subject to terms and conditions, though, so it is always best to check with your equity release advisor first.

Please call our 24-Hour Helpline: 0330 058 1579

Home Reversion Plan

If a lifetime mortgage equity release plan is not for you, then you should consider a home reversion plan.

A home reversion plan is when a lender buys part of your home, and in return you receive either a cash lump sum, or monthly payments.

However, when you opt for a home reversion plan, you will only usually get approximately 30% – 60% of the actual market value of your home. However, this does depend on a number of different factors and will vary between lenders and situations.

Individuals are however able to continue living in their home under a home reversion plan. They are able to live there either rent free, or for a fixed amount of rent which will increase over time

However, you are not able to sell your home unless you pass away, or move into a long term care provider facility.

You will need to be aged 65 or over in order to qualify for an equity release plan. The older you are, the higher the amount of your property market value you will get.

Please call our 24-Hour Helpline: 0330 058 1579

Things you Should Know about Equity Release in Herefordshire

Equity release in Herefordshire is a great option if you want some additional income and savings without having to move house or downsize.

However, there are certain things that you should know before you take out an equity release plan in Herefordshire. There are a few reasons why equity release in Herefordshire might not be for you. Some of these reasons include.

For example, an equity release plan might be more expensive compared to other options, such as a loan or another form of mortgage. If you choose to take out a lifetime mortgage in Herefordshire, then you will most likely be charged more interest than you would if you were to take out another form of mortgage.

It is important to understand that this interest can quickly grow into compound interest.

In addition to this, a home reversion plan will never give you the true market value of your home. You will be able to sell your home for more money on the housing market. However, you will obviously have to move home if you do so, which many people considering equity release simply do not want to do.

If you want to move home after your equity release plan has been taken out, you might need to repay some of your mortgage before you do so.

Your equity release scheme might also impact whether you are entitled to any tax benefits or state benefits. If you do currently receive either of these, then your equity release advisor will need to explain the consequences to you if you were to take out an equity release plan.

It is also important to understand that when you undergo an equity release scheme, you will need to pay for the setup and arrangement costs, which can sometimes cost up to £3,000 depending on the complexity of your scheme and equity release plan.

It is also important to understand that an equity release scheme will usually impact your family members and next of kin. Therefore, you should always make sure that they are well aware of the consequences of going ahead with the plan.

Please call our 24-Hour Helpline: 0330 058 1579

What are the advantages of equity release in Herefordshire?

If you are considering equity release in Herefordshire, then you need to understand that equity release is complex, and comes with many pros and cons.

Your equity release advisor should sit down with you and talk about the benefits and disadvantages to equity release in Herefordshire, to ensure that you might make the best decision that is right for you.

Below is a list of just some of the advantages and disadvantages when it comes to equity release in Herefordshire.

One of the main advantages of equity release is that you are able to receive a lump sum, or a series of payments as part of your equity release plan.

You are also able to remain in your home until you die or move into long term care, which allows individuals to enjoy their home, which they would have created so many memories in.

Equity release also gives you a lot of flexibility to spend your money however you want it, and it also allows you to move home should you choose to in the future, subject to the terms and conditions of your plan.

Please call our 24-Hour Helpline: 0330 058 1579

What Does Equity Release Cost?

Unfortunately, taking out an equity release plan does involve a number of different costs, that could set you back a few thousands of pounds.

For example, some people have to pay a monthly repayment for interest on their equity release loan. Some others also have to pay a fee towards the cost of your equity release advisor, so that you get the very best advice and support.

You will also have to pay for someone to come and value your home, so that the lender has a true and current valuation of your property. This alone can cost a few hundred pounds.

If you are to go ahead with the equity release loan, then you will also need to pay for legal fees to fund the cost of the solicitor who will be working on your case. All of your paperwork and contracts must be checked by a professional solicitor and they must liaise between yourself and the lender.

If you are considering equity release in Herefordshire, but are worried about the costs, then speak to a member of the Equity Release Warehouse team for advice and insight into the true costs of equity release in Herefordshire.

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

In order to qualify for equity release in Herefordshire, there are a number of things that need to be in place.

  • You will need to be aged 55 or over
  • You will need to own your own home in the UK
  • Your property needs to be worth more than approximately £70,000
  • You need to have built up enough equity in your home
  • You need to be planning on staying in your home for a number of months or sometimes years after taking out the plan

When you are considering equity release in Herefordshire, it is easy for people to get swept away with the prospect of receiving one very large lump sum. However, you will also need to focus and think about how your equity release plan will impact your future.

If you are considering equity release in Herefordshire but are unsure whether you would qualify, speak to an Equity Release Warehouse advisor for advice.

How Does Equity Release in Herefordshire Affect Benefits?

As previously discussed on this page, opting for an equity release plan in Herefordshire might impact any benefits you are receiving.

This is because most equity release plans in Herefordshire ensure that any benefits are declared. If you do receive any state benefits, then you might not qualify for an equity release plan.

Some of these benefits include the following.

  • Any income support
  • Council tax support
  • Job seekers support
  • Pension credit
  • Income support

If you receive any of the above, then you will need to declare this to your equity release advisor. Any trained advisor will know to check this with you before applying for an equity release loan.

Please call our 24-Hour Helpline: 0330 058 1579

Questions to Ask Your Equity Release Adviser in Herefordshire

If you are considering equity release in Herefordshire, then speak with an equity release advisor at Equity Release Warehouse.

Below are a number of different questions that you should ask them.

  • What conditions are in place if I ever want to move home?
  • How will an equity release scheme impact any benefits I am currently on?
  • How long can I stay in the property for?
  • How will my inheritance work if I take out an equity release scheme?
  • How much interest will I most likely have to pay back?
  • Is it best to pay my interest back monthly or not?
  • What happens if I live with another family member who is not on the deeds to the house?
  • What happens if my tenant in common is younger than 55 years old?

If you want more information on equity release in Herefordshire, then speak to a member of our team on 0330 058 1579 or by contacting us online to request a call back.

Our friendly and helpful team will assess your equity potential by using our equity release calculator, and will offer you a range of different options that are right for you and your family.

References

[1] https://www.handbook.fca.org.uk/handbook/glossary/G1905.html

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