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Equity Release in Staffordshire

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Equity Release in Staffordshire

If you are struggling with the cost of living across Staffordshire, then you might want to consider equity release in Staffordshire to help you to overcome these surging costs.

Unfortunately, the cost of living has been on the rise since the start of 2021, with inflation now its highest in decades.

If you have turned on the news in the past couple of months, then you would have heard politicians and advisors talk about consumer prices, energy prices and inflation.

The consumer regulator, Ofgem, has recently announced a staggering 54% increase on the price cap for everyone’s energy. The consequence of these is already being seen across the UK, with more and more people vowing to cancel direct debits, using food banks and an increase in homelessness.

With energy costs set to rise once again in October 2022, many people across Staffordshire are worrying about the cost of living and might be considering selling their home to downsize and get a bit of money and cash back in the bank.

If you are struggling with the cost of living, or just simply want more available money in the bank, then equity release might be a great solution for you.

Lots of people use their equity release to find any home improvements, increase their quality of life during retirement, cover the cost of any healthcare required, or to help their children or grandchildren financially, such as paying for a deposit on a first house or helping to fund University fees.

However, with the cost of living going the way it is, equity release might be used to increase your savings and income in an attempt to overcome the rising cost of living.

If you live in Staffordshire and are looking for more access to your finances, then equity release in Staffordshire might be for you.

Please call our 24-Hour Helpline: 0330 058 1579

What is Equity?

Home equity is the value of a property and the owners interest in their home. This includes the property’s market value if you were to sell it, and the amount of equity in the house that has been paid through the mortgage.

Unfortunately, this fluctuates overtime and for most people, only increases as time goes on.

If you are struggling to understand the concept of equity, then think of equity in the following ways.

  • Home equity is the market value of the property, minus the mortgage attached to the property
  • When you put down your deposit on your property, this is included in the equity
  • Your monthly mortgage payments also contribute to the equity in your home
  • If you pay less in your deposit, then your mortgage and monthly repayments will be more
  • The equity in your home will fluctuate for a number of different reasons including inflation, interest rates and the general state of the housing market in your area

If the majority of your home is purchased through a mortgage loan, then the lender will continue to charge interest on the home each month until the loan has been paid off. With added interest, this will take many, many years and will also compound very quickly.

A good way to think of home equity is to think of it as the amount of the home the individual owns at any given time, including their deposit and monthly repayments, not including the interest you are paying.

It is, however, important to understand that the price of a house can fluctuate up and down, so what you pay for the house might not necessarily be what you sell it for. You might lose or make money, or simply not make any money at all on the value of your house.

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

Please call our 24-Hour Helpline: 0330 058 1579

What is Equity Release?

An equity release scheme is something you should consider later in life, when you have built up a lot of equity in your home and want to release some of it back into your pocket.

According to the Financial Conduct Authority Handbook, an equity release provider is someone who has permission to enter into a regulated mortgage contract, whether that be a lifetime mortgage or a home reversion plan [1].

It is highly important that if you are considering equity release in Staffordshire, that you talk to an equity release specialist and advisor before you make any major decisions.

You should seek our equity release specialist knowledge as equity release in Staffordshire does impact a number of different things, including any state benefit, tax liabilities and the overall selling price of the house you might wish to leave as inheritance to family and loved ones.

Equity release involves releasing a percentage of the equity built up in your home, over the many years you have owned your home.

This will include the money you have been paying in your monthly mortgage repayments, as well as the initial deposit you put down when you first purchased the home.

There are many different forms of equity release in Staffordshire, some of which are explained and discussed below on this page.

If you are considering equity release in Staffordshire, then speak to a member of our specialist team at Equity Release Warehouse. Our specialist advisors will be able to sit down with you and discuss your financial situation, whilst explaining the pros and cons behind equity release in Staffordshire.

At Equity Release Warehouse, we are independent advisors who only have your best interest at heart. We will act on your behalf, and advise you on all the moving elements to equity release in Staffordshire. We simply present you with all the very best available options and let you decide.

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

Please call our 24-Hour Helpline: 0330 058 1579

Property and Equity Release in Staffordshire

Staffordshire is a beautiful place to live. Throughout Staffordshire, home owners and residents benefit from beautiful countryside, great pubs and restaurants and postcard villages. Staffordshire has been a popular place for over 55’s to settle down in for many decades.

That is why a lot of people who live in Staffordshire might be considering equity release in Staffordshire in later life. Not only this, but property rises in Staffordshire have been steadily rising over the past few years, which might influence people’s decision and interest in equity release in Staffordshire.

For example, according to a study carried out by Rightmove in 2020, prices increased 9% between 2019 and 2020, and a staggering 13% between 2018 and 2019. If you’re curious about how much your house in Staffordshire might be worth now, then you are not the only one.

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

Please call our 24-Hour Helpline: 0330 058 1579

How Does an Equity Release Mortgage Work?

Lots of people who are considering equity release in Staffordshire might feel anxious about the equity release process.

Mortgages, equity, interest rates and finances are confusing at the best of times, which is why it is important to speak with an equity release specialist and advisor before you sign on the dotted line.

However, if you are looking for more insight into how equity release in Staffordshire works, then read our below step-by-step guide on how to get an equity release mortgage in Staffordshire.

Step 1 – Advice

The very first step to equity release in Staffordshire is to get advice from a highly trained and qualified professional. Before you take out your equity release plan in Staffordshire, you must first sit down with a financial advisor who has a strong understanding when it comes to equity release in Staffordshire.

Your advisor will not only talk you through the process in more detail, but they will also check to see if you are eligible, ask questions and check with their equity release calculator to ensure that equity release in Staffordshire is right for you.

Your equity release advisor will ask you questions about your current financial situation, why you are taking out an equity release plan and what you plan on doing with the equity funds once they land in your bank account.

During this time, your equity release advisor will talk you through the pros and cons surrounding equity release in Staffordshire, and will be able to advise you on which plans suit you and your financial situation the best.

Please call our 24-Hour Helpline: 0330 058 1579

Step 2 – Home Valuation and Equity Release Mortgage Offer

The second step when it comes to equity release is the valuation and offer. At this stage, if you are happy to go ahead with equity release in Staffordshire, then you will need to appoint a solicitor who specialises in equity release in your area.

From this moment onwards, they will liaise with all the relevant parties and act on your behalf. Your advisor and solicitor will help you to process all of the different background paperwork.

It is also important to remember that someone will need to visit your home in person to carry out a home valuation.

They will need access to both the inside and the outside of your property so that they can make a fair valuation report. They will also ask a number of different questions about the property during the home valuation report.

Once everyone is happy, the lender will sign off on your application and will offer you a contract through your solicitor for you to sign and return. It is also worth always keeping a copy of this for yourself, should you ever need to refer to it in the future.

Please call our 24-Hour Helpline: 0330 058 1579

Step 3 – Money in Your Bank

Finally, once you have signed and returned your contract, upon receiving this they will release your money to your chosen solicitor who will then release this money to you as agreed.

There are many different ways you can choose to receive this money. Some people choose to receive their money in one lump sum to help to pay for large costs, and some others choose to receive their money in smaller amounts over a number of months or even years.

Now that the money is yours, you can choose to spend the money in whichever way you want. Some people choose to spend this on themselves, and some others choose to spend the money on loved ones or family members.

If you are considering equity release in Staffordshire but want or need more information on the process, then our team of specialist advisors at Equity Release Warehouse are able to safely guide you through the process from start to finish.

Please call our 24-Hour Helpline: 0330 058 1579

What Can I Use the Money I Get from Equity Release in Staffordshire For?

There are lots of different ways you can use your money and funds from your equity release in Staffordshire.

For example, some people might choose to spend their equity release in Staffordshire on home improvements, in an attempt to increase the value of their home or to add more space for an ever-growing family.

Some others might choose to spend their money on themselves, and treat themselves to a nice new car, or to a luxury holiday for themselves or their family.

Other people might choose to give their money to their loved ones or family members, to help with University fees or to help put down a deposit on a first home for their grandchildren.

It is important to understand that you are free to do what you please with the money you get from equity release in Staffordshire.

However, during the current cost of living crisis, Equity Release Warehouse advise that you do put some of the money away for your essential living costs, and you should always choose to clear any existing debt off first, before you treat yourself to anything luxury or unnecessary.

If you are living in Staffordshire and are considering equity release in Staffordshire then speak to a member of our team for advice and support on how to take the first steps.

If you are concerned about how you will be able to spend your equity release in Staffordshire, then  speak to a member of the Equity Release Warehouse team for advice and support.

Please call our 24-Hour Helpline: 0330 058 1579

How Does Equity Release in Staffordshire Affect Tax?

Unlike with other loans, you will not need to pay any tax on the equity that is released to you from your home. However, some people who release equity in Staffordshire do find that their tax position and status does change as a result of equity release in Staffordshire.

In order to fully understand how equity release in Staffordshire will affect your tax status, we advise that you speak with an equity release specialist at Equity Release Warehouse to ensure that you are making the right decision for you.

How Does Equity Release Affect Benefits?

Just as equity release in Staffordshire affects your tax position and status, equity release in Staffordshire might also affect any benefits you are currently receiving.

For example, if you use your equity release in Staffordshire to clear any debts you might already have, then this will affect your benefit entitlement.

In addition to this, if you already claim benefit from your local council or the Government, then you must tell the Department for Work and Pensions (DWP) that you are due to receive your equity release in Staffordshire.

It is important to remember that any well-trained and qualified equity release advisor will remind you of this during the initial process.

Please call our 24-Hour Helpline: 0330 058 1579

Rules About Equity Release in Staffordshire

If you are considering equity release in Staffordshire, then it is important to remember that all home equity plans (including both lifetime mortgages and home reversion plans) are regulated.

1. The Financial Conduct Authority (FCA)

They are regulated by the Financial Conduct Authority, otherwise referred to as the FCA.

The FCA has introduced a number of different rules when it comes to equity release plans, and ensures that all lenders are fair, reasonable and offer sensible deals.

They will also ensure that any equity release advisers are also offering and recommending products that are suitable and sensible for you and your current financial situation.

In addition to this, the FCA also ensures that all financial and equity release advisers and lenders take into account the benefit and tax repercussions for you prior to taking out the equity release plan for you [2].

2. Equity Release Council

In addition to the Financial Conduct Authority (FCA) the Equity Release Council (ERC) are a non-for-profit organisation who represent a number of different lenders, providers and advisors when it comes to equity release in Staffordshire.

The Equity Release Council (ERC) provides consumers and homeowners aged 55 or over with information, guidance and even protection if you are considering equity release in Staffordshire.

The ERC will ensure that all providers follow the FCA’s guidance and rules very closely when it comes to equity release in Staffordshire, which safeguards you from any wrong investments [3].

The ERC also set their own standards when it comes to equity release in Staffordshire. For example, they believe that all lenders and advisors should only put a product forward if it meets all of the FCA rules. Some of these FCA rules include the following list.

  • Interest rates must be fixed when it comes to lifetime mortgage equity release schemes. If the interest rates are variable for whatever reason, then there needs to be a cap for the entirety of the mortgage.
  • Individuals will always have the right to stay in their own home until they die, choose to leave or move into long term care, such as a care home.
  • All homeowners are also allowed to move into another property if they choose to. However, the new property will need to be suitable as security against your loan.
  • Once the property is sold, you will benefit from a no negative equity guarantee, so you or your loved ones will not be left in negative equity.
  • All ERC members need to speak with an equity release specialist before they enter into an equity release scheme in Staffordshire.

If you are entering an equity release scheme in Staffordshire, then you will also need to ensure that you fully understand the following factors.

  • The costs associated, including the costs of any advice or compound interest
  • What happens if you choose to move houses
  • How your specific plan affects your tax
  • How your specific plan affects any benefits you are entitled to
  • How a changing house market will affect the equity you are entitled to

If you are considering equity release in Staffordshire, then it is important to understand that there are certain rules you, your lender and your advisor will have to follow.

If you want to learn more about these rules, then speak to a member of the Equity Release Warehouse team for advice and support.

Please call our 24-Hour Helpline: 0330 058 1579

Advantages of Equity Release

When it comes to equity release in Staffordshire, there are many advantages.

For example, individuals are able to receive a lump sum or monthly payments from their lender. You are also able to spend this money in whichever way you see fit.

Lots of people choose to treat themselves, whereas others choose to support friends and family members who might be struggling.

You are also fully entitled to stay in your home for as long as you want to, but you are also permitted to move as long as the new property lender accepts the equity release plan.

In the meantime, you do not have to pay any rent on the part of your property owned by the bank, and you can set aside your equity release in Staffordshire for your inheritance.

With some equity release plans, such as a lifetime mortgage, you are able to opt between paying back your interest in instalments or allowing it to build up into compound interest and pay it back all at once.

There is also a no equity guarantee, which means that you won’t have to pay any money back if your house has decreased in value by the time it comes to sell.

Equity release in Staffordshire is also tax free, which means that you will not have to pay tax on the money that you receive.

Please call our 24-Hour Helpline: 0330 058 1579

Disadvantages of Equity Release

However, there are some disadvantages to equity release in Staffordshire. For example, your equity in your home immediately reduces once you withdraw it. A lifetime mortgage is also another form of borrowing against your home.

Additionally, a home reversion plan also means that you will receive a lot less than the market value for your property, in exchange for access to the funds faster. You will also no longer be deemed as the sole owner of the property, as the lender has now bought back some of the property.

There are also early repayment charges if you pay back more than you should be, and you could lose money if you decide to sell your home shortly after taking out an equity release scheme.

It is also worth understanding that if you take out an equity release loan, then as previously discussed on this page, any benefits and tax might be negatively affected as a result of your equity release in Staffordshire.

Please call our 24-Hour Helpline: 0330 058 1579

Speak to Equity Release Warehouse

If you are considering taking out equity in Staffordshire but do not know where to start, then speak to a member of the Equity Release Warehouse team for advice and support.

We are a specialist company that can guide you through the process from start to finish. We offer free consultations where our specialist advisors are able to explain exactly what equity release in Staffordshire works, which plans would be suitable for you and how to take the first steps to a better and more financially free life.

Start by calling us directly, for free on 0330 058 1579 or by contacting us online to request a callback.

Our main priority is to provide you with all the different available options for you and your financial situation. We will never put pressure on you to make a decision, and will never chase or hound you for a decision.

Even if you decide that equity release in Staffordshire is not for you, our advisors will still be able to provide you with alternative options, such as downsizing, getting a bank loan or a credit card.

Whilst we believe that equity release in Staffordshire is the best option for you, we will provide you with alternatives that might be better suited to you and your family.

References

[1] https://www.handbook.fca.org.uk/handbook/glossary/G1904.html

[2] https://www.handbook.fca.org.uk

[3] https://www.equityreleasecouncil.com/about/standards/

 

 

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