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Equity Release in Portsmouth - Lifetime Mortgage Near Me

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

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Equity Release in Portsmouth & Near Portsmouth

Equity release in Portsmouth is a type of loan and mortgage. This type of mortgage works differently to other, traditional mortgages. With equity release loans, you get to gain access to the equity that is tied up in your home [1].

You only repay this once you pass away or move into a care home in your old age, and are free to spend the money on whatever you want in the meantime.

For example, you could spend the equity release funds you receive on home improvements, on further education for grandchildren or helping any children with house deposits.

The best thing about equity release in Portsmouth is that you get to live in your home for as long as you want, without ever having to move or sell up for some extra cash.

By taking out an equity release loan, you won’t have to worry about selling up or downsizing in order to feel financially stable.

Once you pass away or move into a care home, your next of kin will be responsible for selling your house.

They will need to do this within 6 months of you passing away or moving to a care home. The money from the sale of the house will pay off the equity release loan, usually in full.

You will be charged interest on your equity release mortgage. However, unlike with traditional mortgages, your interest rate will be fixed.

This means it’s easy to work out how much you will owe after 5, 10 and even 15 years. Remember, interest will compound each year [1].

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

Different types of equity release in Portsmouth

There are two common types of equity release in Portsmouth. These are called lifetime mortgages and home reversion plans. They are similar in many ways but are also different in other aspects, too.

Lifetime mortgages are available to homeowners aged 55 or over, who own a property in the UK worth at least £70,000.

You also need to have paid off a significant portion of your mortgage. With lifetime mortgages, you only repay the loan once you pass away or move into care, but will be charged interest on this loan.

This will be repaid once you pass away or have to move out of the home and into a care home for health reasons.

You remain the sole owner of the property and won’t ever be asked to sell up or vacate your property, as long as you stick to the terms and conditions of your equity release agreement [2].

Home reversion plans work slightly differently to lifetime mortgages. The main difference between the two types of equity release mortgages is that with home reversion plans, you do have to sell an agreed percentage of your home to your chosen lender for access to the money.

This could be as little as 10% or as much as 90% of your property. The more you sell, the more equity you will receive [1].

However, it’s important to remember that when you opt for a home reversion plan, you will be selling a percentage of your property to a lender for a lot less than the market value of your property.

When you come to sell your home once you pass away or move into care, you will only be selling the percentage of the property that you still own.

This means that there most likely won’t be much left to go to your loved ones as inheritance if you opt for equity release in Portsmouth.

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

How much equity could you release?

On average, people who opt for equity release in Portsmouth can release anywhere between 20% and 50% of the value of their home.

However, there are a number of things that will impact how much equity you can release from your home, which are all explained further below [1,2].

1. Your age

The older you are, the more you are able to release from your home. Whilst this might sound strange to some, when it comes to equity release in Portsmouth, lenders want to know how quickly they are likely to make their money back.

As equity release loans end and are repayable upon death, the older you are the more likely it is that you will be able to borrow more.

2. Your health

Your health also has a huge impact on how much you are able to release from your home. Again, lenders are interested in how quickly they are able to make their money back, plus any interest.

So, they will want to know if you suffer from any long or short term health conditions.

So, if your equity release lender or adviser asks you to declare any health conditions, then do not be alarmed.

3. The value of your property

Naturally, the value of your property in Portsmouth will have a huge impact on how much equity you are able to release. You will only be able to release a percentage of your property, so the more your property is worth then the more you will be able to release from your home.

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

Equity release solicitors in Portsmouth

If you want to apply for equity release in Portsmouth, then you will need to seek advice and support from a qualified equity release solicitor.

This solicitor will need to be fully qualified in all things equity release and be a member of the Equity Release Council [3].

Legal advice is a requirement to qualify for equity release in Portsmouth, rather than an option. Engaging a solicitor to act on your behalf means that you have not only had financial support and advice, but legal advice too.

They will very much act on your behalf and will act as the middleman when it comes to completion and sending across the funds into your account.

You will have to pay a fee, which is usually payable upon completion of your loan. Depending on the type of solicitor you hire, you will be charged anything between £1,000 and £3,000 for legal advice.

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

Who is eligible for equity release in Portsmouth?

If you want to apply for equity release in Portsmouth, then you have to be aged at least 55 or over for any lifetime mortgages, or 65 or over for home reversion plans.

You must also declare your state of health as well as your age, as lenders will be very interested in how old you are and what state of health you are in.

You also need to own your own home in the UK, on mainland England, Scotland or Wales worth at least £70,000 and made out of traditional materials in order to qualify for equity release in Portsmouth.

It is easier if your property is freehold, but it is also possible to release equity from your home in Portsmouth if your property is a leasehold, as long as there is a significant amount of years left on the lease.

You must also be in a position where you have paid off the majority of your pre-existing mortgage, or at least only have a small amount left to pay off.

If you do still have a mortgage, then you will be expected to pay the remaining amount off with the funds you receive from your equity release mortgage. This will be written in your contract if so.

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

Equity release interest rates

Equity release interest rates will vary from lender to lender, but the Equity Release Council ensures that all lenders offer fixed interest rates, rather than variable interest rates.

This means that the amount of interest you are charged on your equity release mortgage will stay the same, no matter what happens in the world.

This also means that your adviser will be able to work out exactly how much you will owe year on year.

Remember, your interest will compound meaning that the amount you owe will increase year on year. As equity release loans continue until you pass away or move into care, this will turn into quite a significant amount.

Risks and benefits of equity release in Portsmouth

At Equity Release Warehouse, we acknowledge that although there are numerous advantages to equity release in Portsmouth, there are also a number of risks and downsides associated with equity release loans [4].

1. Downsides associated to equity release in Portsmouth

One of the major risks and downsides associated with equity release is that you aren’t able to guarantee your family and next of kin as much as an inheritance as you would if you took out a traditional loan.

Likewise, when you opt for a home reversion plan, you have to sell a percentage of the property to a lender for a lot less than the market value. This means that you won’t get as much back, compared to if you sold it traditionally.

2. Benefits associated to equity release in Portsmouth

One of the major benefits associated with equity release in Portsmouth is that you’re free to spend the money you receive on whatever you want and won’t ever be forced out of your home. You can make some home improvements, or simply treat your family or grandchildren.

You also don’t have to repay the loan until you pass away or move into a care home, meaning that you don’t have to worry about any monthly mortgage or loan repayments, as you would with a traditional loan or mortgage.

Your family will never be expected to step in and pay the loan off if the sale from your house does not cover the loan amount. This is called the no negative equity guarantee, and ensures that if this should happen then your lender pays off the loan.

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

What is the impact equity release in Portsmouth has on inheritance tax?

Inheritance tax is calculated based on the value of your estate, including the value of your property and the amount of savings in the bank. By opting for equity release in Portsmouth, the value of your property and therefore the value of your estate is reduced.

This means that once you die, you will pay less inheritance tax. If you release a significant amount, then your estate might fall under the inheritance tax threshold altogether.

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

References

[1] https://www.aviva.co.uk/retirement/equity-release/knowledge-centre/what-is-equity-release/#:~:text=Equity%20release%20with%20a%20lifetime,over%2C%20without%20having%20to%20move.

[2] https://www.santander.co.uk/personal/mortgages/new-customers/later-life-mortgages?s_kwcid=AL!13209!3!670910940949!e!!g!!how%20much%20equity%20can%20i%20release&gad_source=1&gclid=Cj0KCQiA7OqrBhD9ARIsAK3UXh0or_gSP2V3GdZmVaIhx3HlPymx1BRGgI0PtGlJBq3-salIRcd-BGkaAvAeEALw_wcB&gclsrc=aw.ds

[3] https://www.equityreleasecouncil.com/find-a-member/solicitors/

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

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