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Equity Release in North London - Lifetime Mortgage Near Me

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

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Equity Release in North London & Near North London

Equity release lifetime mortgages are the most common type of equity release in North London. However, each lifetime mortgage plan has different rules, regulations, benefits and drawbacks, which will outline below.

The 8 different forms of lifetime mortgage are:

When you speak to an equity release adviser in North London, they may inform you that you are eligible for benefits that come with a particular plan.

For instance, if you are in poor health, you could release more money from your North London home on the enhanced equity release plan.

In that case, it would make sense to go for the plan that offers the best benefits. However, it isn’t always as simple as this.

Most lifetime mortgages vary in what they can offer to each client. Depending on your location, property value, age and other factors, you will have a different experience with your lifetime mortgage.

The next equity release in North London product is the home reversion plan. This is a much more uniform product, so potential home reversion customers may find it easier to know what to expect.

All of these customers will sell their home (or a share of it) to get equity release funds. Interest is irrelevant for this product as customers receive lump sum payments in exchange for selling their home, rather than getting a loan.

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Are Flexi-Access Drawdowns the Best Option For Equity Release in North London Consumers?

If you have looked into equity release in North London, you have probably heard of flexi-access drawdown lifetime mortgages. This type of equity release product allows consumers to keep money in a cash reserve and take it out when they need it.

The reason there is a spotlight on this scheme is that it is great for customers who want to avoid compound interest and large lump-sum payments.

They only pay interest on the cash lump that they take out, so the compound interest is much lower than average.

What’s more, this scheme provides a great deal of flexibility. Many cash-poor customers need some equity release funds to get by, but they aren’t yet sure what they want to spend their full loan on.

With a flexi-access drawdown, they can withdraw a lump sum for a specific purpose, and save the rest while they weigh up their options.

As valuable as flexi-access drawdowns may be, they aren’t the best option for all equity release in North London consumers.

Some customers prefer to get a lump sum for ease of access, or to pay for something immediately e.g., home improvements or gifted deposits.

Others are happy to receive monthly loan payments to help with London living, but they are drawn to other schemes for different reasons e.g., lower interest rates or free repayments.

There are a wide range of equity release products that all bring something different to the scheme. Don’t discount other brilliant plans simply because the drawdown plan features heavily in the media.

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Is My North London Property Suitable For Equity Release?

All equity release in North London properties must be worth £70,000 or more. This applies to both houses and apartments, with the possible exception of retirement apartments and leasehold properties.

You must speak to an equity release adviser before putting your beautiful property forward for equity release in North London.

At this stage, you will be informed whether your property is likely to be accepted based on general rules e.g., you cannot release equity if you rent your home.

If you want to find out whether your preferred equity release in North London provider will accept your property, you need to apply to one of their plans.

If you pass the initial stages, the company will organise a property valuation and confirm whether your home is suitable for their scheme.

Although the location of your property can affect loan amounts and interest rates, you can take out equity from anywhere in North London with an eligible property.

This includes:

  • Archway
  • Barnet
  • Barnsbury
  • Belsize Park
  • Brent
  • Camden Town
  • Central London
  • Crouch End
  • East Finchley
  • Enfield
  • Finsbury Park
  • Hampstead
  • Highgate
  • Islington
  • Stamford Hill
  • Stoke Newington
  • Tower Hamlets
  • Tufnell Park
  • Waltham Forest
  • Wembley
  • West Hampstead
  • Haringey
  • Finchley
  • Golders Green
  • Kentish Town

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Am I Suitable For Equity Release in North London?

If you know that your property meets the general requirements for equity release in North London, it’s a great start.

This is especially true for North London customers as the property market is excellent for equity release.

With an average house price of £872,261, there is plenty of opportunity for people to release significant sums of money from their homes.

However, having a valuable property doesn’t necessarily mean you will meet the other criteria.

As well as owning a home worth £70,000 or more, you must be at least 55 years old.

You will not find a genuine equity release provider offering products to people below this age, so you can be sure that any companies promising this are not regulated.

There is no age that is deemed too old for equity release in North London. This means regulated companies are allowed to offer loans to people of all ages above 55. However, they may impose their own upper age limit, such as 80 or 90.

Individuals who meet the aforementioned eligibility criteria should consider whether equity release in North London would help them out financially.

There are many additional factors to explore, such as your current financial situation, your plans for retirement, your family’s inheritance and your eligibility/suitability for other schemes.

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How Does Equity Release in North London Affect Inheritance Tax?

Equity release in North London can save your family from paying inheritance tax on the money they receive when you pass away. As inheritance tax is charged at 40%, this is an excellent bonus of equity release (1).

Consumers of equity release in North London can expect to avoid inheritance tax if the value of their estate is below £325,000 after they release equity. This applies to most customers.

Given that there is so much bad press surrounding inheritance after releasing equity, it’s important to remember this benefit.

Equity release advisers will help you to calculate your family’s potential funds if you released equity (and most likely avoided inheritance tax) vs if you stayed away from equity release and left a full inheritance.

We know that the majority of people who take out equity want to make sure they don’t neglect their families financially.

This is why we promote aspects of equity release in North London that improve inheritance prospects, such as inheritance protection and gifting to loved ones.

The reason gifting works is that you can give money directly to a family member instead of leaving it in your will, and it will be exempt from inheritance tax.

The condition is that inheritance tax will be charged if the equity release consumer passes away within seven years after gifting the money.

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How Does Equity Release in North London Affect the State Pension and Private Pensions?

Equity release in North London consumers will still receive the State Pension they are eligible for. If they are entitled to the full State Pension, they will get this regardless of how much money they have released from their home.

This is because eligibility for the State Pension is unrelated to income. The qualifying factors are age and National Insurance contributions.

The new State Pension is given to women born on or after 6th April 1953 and men born on or after 6th April 1951 who have 10 or more qualifying years on their National Insurance record (2).

Some people believe their savings may affect their State Pension as they are confusing the State Pension with Pension Credit. The former is offered to everyone above a certain age with a 10-year National Insurance record, whereas the latter is a government benefit for people on a low income.

Pension Credit eligibility is affected by savings, as the full amount is only given to people with less than £10,000 in savings. Reduced amounts apply if savings exceed £10,000.

Every £500 over £10,000 is classed as £1 weekly income and added to the applicant’s overall income to determine the amount they are entitled to (3).

You do not need to worry about equity release in North London affecting your private pensions either. Any money you have saved in a private pension is all yours, regardless of how much income you accumulate in your lifetime. This includes equity release funds.

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How Does Equity Release in North London Affect Long-Term Care?

When you are considering equity release in North London, you should think about the fact that you may end up needing long-term care as you get older. You must ensure your equity release loan does not prevent you from being able to access this.

There are not many situations in which equity release in North London would prevent you from paying for residential care.

You simply need to make sure you plan financially for long-term care, which means you shouldn’t spend all of your equity release loan unless you have plenty of savings to use for residential care.

Something else to consider is that people with a good income may not be able to get reduced care home costs. This isn’t a problem if you have released lots of money, as you will be in a position to pay the full fees.

However, if you are currently on a low income and claiming benefits, it is possible that care would be more affordable (or free) if you didn’t release equity.

As always, professional equity release advice is the best route to take if you are weighing up this decision.

Anecdotal evidence can help, but you need a personalised illustration to see exactly how equity release in North London would unfold for you and your family.

Please call our 24-Hour Helpline: 0330 058 1579

Equity Release in North London as a Single Person Vs a Couple

Contrary to popular belief, you can get involved with equity release in North London if you are single. You must keep in mind that it will be more expensive to set up the scheme based on a single income, but you can use the loan to cover this if necessary.

We cannot think of any other negatives to releasing equity as a single person compared to being in a couple. The amount of money you can access will be the same (as it is based on age and property value), which means you will ultimately get more support out of the scheme.

That being said, if you are living with a partner, there can be downsides to taking out equity on your own.

It leaves your partner in an unstable situation if you pass away or enter long-term care first. When this occurs, the property needs to be sold, so your partner would have to find another place to live.

We strongly recommend releasing equity with your partner if you are in a relationship. They will need to meet the eligibility requirements, so they must also be 55 years old or more.

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How to Avoid Getting Into Negative Equity

Negative equity is a risk that comes with some equity release in North London products. It occurs when a consumer gets into debt due to spending more money than they borrowed.

This could either be a case of compound interest rolling up, or the value of the property decreasing over time.

There is an easy way to stay away from negative equity. You can find an equity release plan with a no negative equity guarantee.

Once this is established, no matter how much money you spend and how much your property value drops, you will not end up in debt.

Any money you have dedicated to your family will still be passed on, and only your home will go to your equity release lender.

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What Role Does the Equity Release Council Play in Equity Release in North London?

The Equity Release Council keeps equity release in North London safe by setting standards for lenders (4).

These standards change over time as new risks and rewards are investigated, which means equity release is a very flexible scheme.

The current product standards can be found on the Equity Release Council website. They are as follows:

  • For lifetime mortgages the rate must be fixed for each release or, if variable, the rate must be capped for the life of the loan.
  • You must have the right to remain in your property for life or until you need to move into long-term care, provided the property remains your main residence and you abide by the terms and conditions of your contract.
  • You have the right to move to another property subject to the new property being acceptable to your product provider as continuing security for your equity release loan.
  • The product must have a “no negative equity guarantee”. This means that when your property is sold, and agents’ and solicitors’ fees have been paid, even if the amount left is not enough to repay the outstanding loan to your provider, neither you nor your estate will be liable to pay any more.
  • All customers taking out new plans which meet the Equity Release Council standards must have the right to make penalty-free payments, subject to lending criteria.

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Can Equity Release Help Me to Stay in North London in Retirement?

Many people are forced to leave London eventually due to the high cost of living. If you dream of spending your retirement in the capital, you don’t have to give up this dream due to being a low earner.

Equity release in North London could help you to stay in the city without getting into debt. You would continue to live in your property, enjoying all of the benefits of city life, while accessing tax-free cash on a monthly basis (or as a lump sum).

Some examples of reasons people choose to release equity to stay in North London are:

  • You can keep your beautiful home in the city
  • Retirement boredom may be less common in a bustling city
  • The access to transport links is unbeatable (e.g., tube stations, train stations, bus stations)
  • The range of amenities provides security as you age
  • There are an array of entertainment options (e.g., art house cinemas, theatres, restaurants)
  • You can access acres of park and green spaces without having to live remotely (e.g., Fenton House, Hyde Park, Regent’s Park)
  • Each part of London is like a different city in itself (e.g., Primrose Hill, Covent Garden, Notting Hill, White City, Camden Town)
  • There are constant new developments and major regeneration schemes e.g., the new Elizabeth Line
  • There are more affordable options for housing that still allow you to access the city centre by tube
  • There are brilliant connections for people who are still working when they release equity
  • The average price of housing has increased since most homeowners bought their London properties (which means they have an extremely valuable asset in their home)
  • The university opportunities are ideal for children and grandchildren (e.g., University of London, Imperial College London, University College London)

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How Can Equity Release Warehouse Help Me With Equity Release in North London?

Our equity release advisers can give guidance on releasing equity in North London or other parts of London e.g., North West London, East London, South East London, South London or Central London.

To find out other areas of the UK we specialise in, browse our extensive list.

All you need to do to access expert equity release in North London advice is call us on 0330 058 1579. We are always ready to delve into the specifics of the scheme and tell you exactly how you could benefit from it.

Due to the prevalence of equity release scams and mis-sold schemes, we are committed to safety across the board.

This means we always advise our customers to find regulated lenders and solicitors, to dedicate time to researching plans, and to find out how the scheme would affect them in the long term as well as the short term.

By booking a telephone assessment and following our advice, you can make informed decisions about your retirement, including whether equity release in North London would help with your living costs. London living is notoriously expensive, but there is no need to suffer in retirement as a result.

We can tell you the potential equity release amount you may be offered. If you aren’t interested, there’s no pressure whatsoever, but if you are, we can tell you exactly how to access this tax-free cash in North London.

References

[1] How Inheritance Tax works: thresholds, rules and allowances https://www.gov.uk/inheritance-tax

[2] The new State Pension https://www.gov.uk/new-state-pension

[3] Pension Credit https://www.gov.uk/pension-credit/eligibility

[4] Our Standards https://www.equityreleasecouncil.com/about/standards/

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