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Equity Release in Reading

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Equity Release in Reading

If you are considering equity release in Reading, then you should speak with a member of the Equity Release Warehouse team for advice and support.

Equity release is when you release equity from your home, which you will then pay back when you sell the property.

There are two different types of equity release in Reading and across the rest of the UK, which are known commonly as lifetime mortgages and home reversion plans.

There are lots of different reasons why someone might release equity from their home in Reading, and it is always important to speak with a fully qualified equity release advisor before making any final decisions.

At Equity Release Warehouse, our advisors are able to guide you on the equity release process, as well as the ins and outs of equity release.

If you think that equity release in Reading might be for you, then speak to one of our advisors.

Please call our 24-Hour Helpline: 0330 058 1579

Why Should You Release Equity from Your Home?

Equity release in Reading is extremely popular, and there are lots of different reasons why people choose to release equity from their home.

For example, some people choose to release equity from their home to help with any home improvements or house renovations.

You might want to increase the value of your property by making an extension, or you might choose to make your home more comfortable and easy to move around as you enter later life.

It is important to remember that by doing home improvements and adjustments to your property you will, in most cases, be increasing the value of your house and therefore increasing the amount of inheritance you leave to your family and next of kin if you were to opt for an equity release scheme.

You might also choose to put your equity release money towards paying off your existing mortgage, which is often mandatory for some equity release lenders.

Other people choose to spend the equity they release from their home on their loved ones. If you have a family in Reading, then you might choose to give some money to them, in order to help with any university fees or house deposits.

You might also choose to buy a second property, which you might choose to use as a holiday home for you and the family, or you might choose to rent that property out to other people so that you can increase your income by increasing the amount of inheritance you will leave for your loved ones after you pass away.

Alternatively, you might choose to use your equity release funds to pay for carers to help you in your day-to-day living, if you or your partner is needing more assistance as they get older.

Other people simply choose to top up their pension with their equity release funds, allowing them to spend a more comfortable or even luxurious retirement in later life.

If you are considering equity release in Reading, then you will need to think about what you want to spend your equity release money on before you speak with any equity release advisor from Equity Release Warehouse.

This is because your equity release advisor will certainly ask you what your motivations and reasons are for choosing equity release.

You must be open and honest with your equity release advisor about why you want to release equity from your home in Reading, as this will definitely determine what type of equity release plan your advisor chooses for you and recommends.

For example, you might be recommended for a lifetime mortgage or a home reversion scheme, which are both explained below.

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A Lifetime Mortgage

Throughout Reading and the rest of the UK, most people who take out an equity release plan take out a lifetime mortgage.

With a lifetime mortgage, you will not have to make any repayments until you pass away, which is a huge benefit and draw for many people and is why equity release in Reading is so important.

However, some people opt to pay off the interest on their equity release loan each month, as the interest on the equity release loan does not compound.

If this does happen and individuals do not pay off their interest each month, then they will be expected to pay off the compound interest on the loan once the house is sold in the event of your death.

According to the Institute and Faculty of Actuaries [1] there are also a number of risks associated with lifetime mortgages across Reading.

Some of these key risks include the security of your equity release loan, as well as the fact that your interest payments will continue for the rest of your life [1].

Some lifetime mortgages allow you to pay off the interest on your loan each month to avoid compound interest, whilst others might not.

This is why it is incredibly important to speak with your equity release advisor about what you want from your equity release loan so that they can recommend the very best equity release plan for you.

There are a number of things that are important to remember when you consider a lifetime mortgage in Reading.

For example, you will need to be aged 55 or over in order to be accepted for a lifetime mortgage. However, the younger you start a lifetime mortgage then the more you will have to pay back and the more expensive it will be.

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With a lifetime mortgage, you are also not allowed to borrow more than 60% – 70% of the total value of your home.

However, how much you are allowed to borrow will be determined by your advisor and lender, and will depend on your exact age and your current health status.

You are also not allowed to borrow anything less than 10% of the total value of your property. Your equity release advisor will use the Equity Release Warehouse equity release calculator to determine just how much this will be for you.

If you would like more information on how much equity you can release from your home then visit our equity release website for more information.

In addition to this, the interest rates on your lifetime mortgage will be fixed. Unlike regular mortgages, your interest rates will stay the same and will not move up or down throughout the duration of your equity release scheme.

The Equity Release Council [2] ensures that interest rates across equity release loans are fixed, and if they are not fixed then they ensure that they have upper limits and boundaries.

You also need to understand that with an equity release loan and a lifetime mortgage, you are able to remain living in your home for as long as you want to, but you are also able to move house if you choose to in the future as well.

You are able to move house in the future as long as your new lender will accept the terms and conditions of your pre-existing equity release loan.

In addition to this, the Equity Release Council is also keen to ensure that lifetime mortgages benefit from a no-negative equity guarantee.

This means that when the house is sold, after the event of your death, then your next of kin will not be left in any debt or financial difficulty if the property sells for less than the amount that you borrowed through your equity release plan.

On the other hand, if your property sells for more than your equity release loan then your next of kin and family will benefit from any added inheritance that brings them.

With a lifetime mortgage, you are also able to release money in a number of different ways. For example, you can choose to release money all at once in one large lump sum.

This is a great option for anyone who is choosing to spend their money on a big investment such as a new property, home improvements and house deposit or university fees for loved ones.

However, you are also able to release money in smaller and more frequent amounts, such as monthly or annually. This is a better option if you are hoping to simply use your equity release funds on living a better lifestyle as you enter retirement.

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A Home Reversion

Home reversion plans are similar to lifetime mortgages in some respects, but very different in others. With home reversion plans, you benefit from a no negative equity guarantee and your equity release will be tax free, as with a lifetime mortgage.

The main difference with a home reversion plan is that in order to gain access to the equity in your home, you must first sell a part of your home to the lender.

For example, you would sell approximately 20% – 60% of your home. However, it is important to understand that when you do so, you will be selling this percentage of your home for less than market value.

As with a lifetime mortgage, you are able to ask for your equity via one large payment and lump sum, or a number of smaller and more frequent payments.

In order to qualify for a home reversion plan, you must be aged at least 65 or over, and you must own your own home in the UK that is valued more than £70,000.

With a home reversion plan, you are still able to remain living in your home for as long as you want, and are still responsible for maintaining your property.

As with a lifetime equity release mortgage, you are also able to move house in the future if you wish to do so, but will need your lender to agree to your pre-existing home reversion plan.

It is important to remember that lifetime mortgages and home reversion plans across Reading can turn out to be expensive when you compare it to other types of loans, such as another re-mortgage or a bank loan.

For these reasons, it is really important that you seek the advice of an equity release advisor and a financial advisor before you make any final decisions.

They will be able to highlight all of the available options to you, whilst laying out all of the applicable pros and cons for you.

If you are considering either a lifetime mortgage, a home reversion plan or other plans in equity release in Reading, then you should speak to someone from the Equity Release Warehouse team for advice and support.

Please call our 24-Hour Helpline: 0330 058 1579

How to Choose the Right Equity Release Lender

All equity release lenders and loans across Reading and the rest of the UK are monitored by the Equity Release Council [2] as well as the Financial Conduct Authority [3].

These bodies create a certain list of rules and standards that providers must follow in order to ensure that the investments they offer are fair and responsible.

In fact, the FCA holds an examination for their members, which has very strict qualification and examination criteria [4]. Alternatively, your equity release advisor will have a certificate in regulated equity release (referred to as a CeRER) from The London Institute of Banking and Finance [5].

Therefore, you should ensure that your chosen equity release lender across Reading is monitored and follows the Equity Release Council and Financial Conduct Authorities standards.

You should be able to check this by looking at your chosen lender’s website.

If you are considering equity release in Reading and are currently on the lookout for the right plan and lender for you, then below are a number of different things you should check and ask your equity release lender.

  • How much do they charge when it comes to interest rates?
  • What type of equity release schemes do they offer?
  • Are they a member of the Equity Release Council?
  • Are they monitored and authorised by the Financial Conduct Authority?
  • How long does it usually take them to approve and authorise a typical equity release loan?

If you are considering equity release in Reading, then start by speaking to one of our experts at Equity Release Council for advice on which lenders to opt for.

Please call our 24-Hour Helpline: 0330 058 1579

What Makes Equity Release in Reading a Safe Investment?

More and more people are choosing equity release in Reading, and for good reason. The equity release industry has evolved over the past decade, with more lenders and types of equity release loans than ever.

As the industry has grown, so has the amount of regulation within the industry. It is incredibly important that the industry is standardised and monitored, as this ensures that all investments are responsible and fair.

For these reasons, equity release in Reading is deemed a responsible and safe investment.

There are two different bodies that regulate equity release in Reading, which are the Financial Conduct Authority and the Equity Release Council.

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1. What is The Financial Conduct Authority?

The Financial Conduct Authority (FCA) is there to regulate all products within the equity release industry. They will also ensure that all brokers and advisors also operate within the rules, too. They not only set standards, but they even implement rules for everyone to follow.

2. What is The Equity Release Council?

The Equity Release Council (also commonly referred to as the ERC) represents all of their members across the industry and also set a number of standards for everyone to follow.

If you are a member of the ERC then you will need to follow their rules and guidance, which will ensure that all of your products and recommendations have the clients best interests at heart.

The Equity Release Council wants to ensure that all advisors and lenders offer a no negative equity guarantee, that everyone gains access to financial advice before they take out their loan, and that their loan includes security, which means that individuals are allowed to remain living in their home for as long as they want to.

They also want to ensure that everyone benefits from a fixed interest rate, meaning that the amount that they have to repay in interest will stay the same, and not change every three or five years as they would with a normal mortgage.

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The Pros of Equity Release in Reading

As discussed above on this page, there are a number of pros when it comes to equity release in Reading, which your equity release advisor will happily discuss with you during one of your first meetings with them.

For example, your equity release will be completed tax-free, which means that you will not have to pay any tax on the money that you receive.

The great thing about equity release in Reading and across the rest of the UK is that you do not have to pay off your loan until you pass away and sell the property, which means that you are able to use the sale of the house to fund and pay off your equity release loan.

You are also able to stay living in your home, which is a huge benefit to anyone aged 55 or over as not many people want to move home.

Moving house means a lot of stress and hassle for a lot of people. People might not want to move house because they don’t want to move away from their loved ones, or leave the house that they have known and loved for so long.

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The Cons of Equity Release in Reading

Although there are many pros when it comes to equity release in Reading, there are also a number of cons that are important to understand and consider when choosing an equity release plan.

For example, if you opt for equity release in Reading or especially a home reversion plan, then you might not leave as much inheritance to your loved ones as you would have once hoped.

It is also important to remember that equity release in Reading might not be suitable for you if you currently have other people living in your house with you such as children, parents or even tenants.

It is also worth noting early on in the process that there will be a number of costs associated with your equity release application and plan.

For example, you will have to pay for a recent and up-to-date valuation of your house, as well as the cost of a solicitor to handle your application, communication with the lender and your finances.

You will also need to consider how opting for equity release in Reading will affect your ability to take out any loans in the future, as well as your ability to gain access to any means-tested benefits that you currently have access to or are hoping to in the future.

Finally, you must remember that unless you pay off the interest on your equity release loan frequently, then this interest will grow and build into compound interest which will cost a lot of money when your next of kin sell your house, meaning that you will leave them less inheritance.

Equity release in Reading is a huge commitment, as you must make sure that opting for equity release is the best thing for you and your family.

Please call our 24-Hour Helpline: 0330 058 1579

What Are the Alternatives to Equity Release in Reading?

Equity release is the right decision for many people across Reading and Great Britain. However, there might be a number of reasons why equity release is simply not right for you and your particular set of circumstances.

If you think that equity release might not be for you, then there are a few other alternatives to equity release in Reading that you might want to consider before you make any final decisions.

For example, you could choose to downsize your property. This would involve selling your current property and buying a smaller and cheaper house.

This might be a great option if you are getting older anyway, as you might need to move house to a bungalow or cottage which does not have any stairs.

By doing this, you will gain access to a lot of money you have saved by moving to a smaller and therefore cheaper house.

By opting for a smaller home, you might also find yourself saving money on your energy bills, as your house will heat up quicker as it is smaller.

Nevertheless, downsizing your home to a smaller property might not always be the best option for you, as moving house takes a lot of work and causes a lot of hassle and upheaval.

There are also other loans and mortgages that you might be able to choose from, depending on your current circumstances.

For example, you might qualify for an interest-only mortgage, which gives you a lump sum which you then pay interest on. However, these are often difficult to qualify for.

If you want to consider other options, it is worth speaking with a financial advisor to discuss your circumstances and needs.

Please call our 24-Hour Helpline: 0330 058 1579

Speak to Our Team at Equity Release Warehouse

If you are seriously considering equity release in Reading, then you will need to speak to a specialist before making a decision.

At Equity Release Warehouse, our specialists and advisors are on hand to help and advise you so that you make the right decision for you.

We will not force or pressurise you into making a decision, and by speaking to us you are not committing yourself in any way to equity release in Reading.

You can start by calling us for free on 0300 058 1579 or by visiting our helpful and informative website by visiting us at www.equityreleasewarehouse.com.

Please call our 24-Hour Helpline: 0330 058 1579

References

[1] https://www.actuaries.org.uk/system/files/documents/pdf/lifetime-mortgages.pdf

[2] https://www.equityreleasecouncil.com

[3] https://www.fca.org.uk

[4] https://www.fca.org.uk/publication/documents/equity-release-all-activities.pdf

[5] https://www.libf.ac.uk/study/professional-qualifications/mortgage-advice/certificate-in-regulated-equity-release

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