Equity Release Stockport - Lifetime Mortgage Near Me

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

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Equity Release in Stockport

Equity release is a tried and tested way of gaining access to the equity that has built up inside your home.

More and more pensioners are finding themselves entering retirement with not as much cash as they would have hoped for at their age. This is where equity release in Stockport comes in.

With equity release in Stockport, you are able to release money from your home without having to sell up or downsize.

You do so by releasing a set amount from your home, by borrowing money from the lender. Depending on how much your house is worth, this could be a significant amount.

This is especially the case if you put down a large deposit on your home and have lived there for a number of years [1].

With equity release in Stockport, you don’t have to repay the loan until after you pass away. The loan is repaid through the sale of your home, so your next of kin won’t need to worry about paying off the loan on your behalf.

As with any loan, you will be charged interest. Although, interest with equity release loans will be fixed. Your loan will continue for as long as you live, or until you move into a care home.

There’s two main types of equity release in Stockport. The most popular are lifetime mortgages, which allow you to release a significant amount of your home without having to sell your home to the lender in exchange for your equity.

Home reversion plans are the second type of equity release and work a little differently.

Home reversion plans involve selling a percentage of your home to the lender in exchange for equity release cash, although you will remain living in your home after doing so [1].

What is the Equity Release Council?

The equity release industry is heavily monitored and standardised by the equity release council.

All lenders, advisers and solicitors who operate in the industry should be members of the equity release council.

This means that they will abide by the standards and principles of the equity release council, ensuring that all players within the industry are fair and transparent [2].

Common Reasons to Consider Equity Release in Stockport

There are a number of different reasons why some people consider taking out equity release in Stockport.

Most people who take out an equity release loan have done so to enhance their lifestyle later in life, or to do some home renovations.

Others might choose to opt for equity release in Stockport in order to pay off an existing mortgage, meaning that they won’t have any monthly mortgage repayments going into retirement.

Others release equity from their home in order to pay off any unsecured debts, to go travelling, take their family on a big holiday or to help their grandchildren or loved ones with University fees for further education.

Pros and Cons of Equity Release in Stockport

There are numerous advantages to equity release in Stockport. However, a good equity release adviser will also be keen to talk through the disadvantages of equity release with you, so that you have a strong understanding of the ins and outs of equity release.

This is why you will be able to make an informed decision as to whether or not equity release is for you [3]:

1. Advantages of equity release in Stockport

There are numerous advantages of equity release in Stockport. For example, unlike with other loans, you don’t have to repay your equity release loan until after you pass away or move into a care home.

You also get to release a significant amount of money from your home, depending on the value of your home, without having to sell up or downsize.

Your loan is repaid via the sale of your home, which should cover the total loan amount. If it does not, then the no negative equity guarantee will step in, which is explained further below.

2. Disadvantages of equity release in Stockport

Any good equity release adviser will talk through the disadvantages of equity release in Stockport, as well as the advantages.

Whilst at Equity Release Warehouse, we believe that equity release in Stockport is a great option for many people, there are a few disadvantages to be aware of.

For example, with equity release in Stockport you will be charged interest on your equity release mortgage. This means that this interest will compound each year, increasing your overall loan amount.

As this will need to be repaid once you pass away and sell your home, your loved ones won’t get access to the money from the sale of your home. This means that they won’t get as much inheritance as they might have once hoped.

What Can I Spend My Equity Release Money On And Will It Be Subject To Tax?

The great thing about equity release in Stockport is that you are able to spend the money on almost whatever you want, as long as it stays within the terms and conditions of your equity release loan.

You are therefore free to spend the money you receive on home improvements, on holidays, a new car or even helping loved ones with a deposit on a house or paying off student loans.

In terms of taxation, the money you release from your home will not be subject to any tax deductions, as the money you receive is classed as a loan as opposed to income [4].

However, it is incredibly important to be open and honest about how you plan on spending your money as you will be subject to tax if you invest some of the money you receive (if you exceed your annual tax allowance).

Do I Have to Release my Equity Release Funds All at Once?

Depending on what type of equity release loan you opt for, you do not have to release all your money at once.

Instead, you can opt for a drawdown plan which will allow you to release small amounts of equity for as long as your loan continues.

If you need to release a large amount of money all at once, to pay for home improvements or a pre-existing mortgage or debt, then you might want to opt for a lump sum plan.

Is Equity Release in Stockport Safe?

The equity release industry is now heavily regulated and standardised, making it more safe than ever before.

The Financial Conduct Authority (FCA) is there to protect customers across the industry, ensuring that all lenders, advisers and solicitors are operating fairly.

The Equity Release Council also ensures that all players across the industry are fair, transparent and work within the standards and principles set out by the Council.

This allows the industry to remain fair and transparent and maintain high standards.

How Much Can You Release?

When opting for equity release in Stockport, you are able to release a set amount depending on a long list of influential factors.

These factors include things such as the value of your home, the condition of your home, your age and your health status.

If you opt for a lifetime mortgage, then you will be able to release up to 60% of the value of your home as long as the other factors are all in place.

If you opt for a home reversion plan, then you will need to sell a percentage of your home in order to gain access to equity amount. With home reversion plans, this could be as much as 90% or as little as 10%.

During the initial application process, your equity release adviser will work out a rough estimate using the equity release calculator.

In order to do so, they will need some basic information about you, including your age, your current state of health and a rough estimate when it comes to how much your home is worth.

Can I Make Early Repayments to Reduce Interest?

The short answer is yes. You are able to make early repayments on your equity release loan in an attempt to reduce the overall loan amount and compound interest.

However, depending on which lender you opt for, you will be charged an early repayment fee for doing so.

With equity release in Stockport, most lenders will allow you to repay a lump sum of up to 10% of the value of your loan annually before they will charge you an early repayment fee.

Whilst this can be a great way of reducing the amount of compound interest you are charged, it is important to always check the terms and conditions with your lender if you wish to do so.

What is the No Negative Equity Guarantee?

The no negative equity guarantee is a standardised feature when it comes to equity release in Stockport, as set out by the Equity Release Council.

This guarantee ensures that even if your house decreases in value and no longer covers the overall loan amount, you won’t be responsible for paying off the shortfall. Instead, the lender will step in and pay the rest [5].