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Equity Release in Swansea

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Equity Release in Swansea

Equity release in Swansea is becoming an increasingly popular option for those aged over 55 years old, nearing retirement, who own their own home in the UK worth at least £70,000.

Equity release in Swansea works by allowing homeowners in the UK the chance to release some of the equity from their home for them to enjoy.

If you are over 55 years old and have lived in your home for a number of years, then you will probably have a lot of equity built up in your home, which can be really useful to dip into when you need it.

There are two main types of equity release in Swansea and across the UK, known as lifetime mortgages and home reversion plans. These plans are explained further below, and which plan you should opt for will depend on a number of different factors, including your age.

If you are considering equity release in Swansea, then you must first speak to an equity release advisor before applying for an equity release loan.

Your equity release advisor will talk you through each plan, as well as the overall pros and cons of opting for equity release in Swansea. Your equity release advisor will also talk you through the interest rates and which lenders might be best for you and your family.

All advisors should be trained in equity release specifically, as it is often not enough to speak to an ordinary financial advisor. The job of any equity release adviser is to inform and educate you on equity release in Swansea and the rest of the UK, and not to put any pressure on you to make a decision.

If you are considering speaking to an equity release advisor, then make sure that they are a member of the Equity Release Council first.

The Equity Release council is a standardising body that ensures that all advisers and lenders are offering fair and transparent loans to their clients.

The best thing about equity release in Swansea, and what makes equity release in Swansea such an attractive option is that you do not have to repay a penny until after you pass away or move into a care home.

When you do, your next of kin will have to sell your property and use the money from the sale of the house to pay off the equity release loan.

One of the biggest things you will have to bear in mind when it comes to equity release in Swansea is that you will be charged interest on your loan.

This interest will build up into compound interest over the course of your loan, which is why a lot of lenders allow borrowers the option to pay off the interest on their loan whilst they still live, if they choose to do so.

By doing so, you will be reducing the overall loan amount, which means that your future selves won’t be charged as much compound interest, as the overall loan amount is lesser than it once was.

Your next of kin will also thank you for paying off the interest on your loan as you go, as this means that there will be more money left over for them after selling the property.

With equity release plans across Swansea, there are no restrictions on how you can spend your money. You can choose to treat yourself to a home renovation, a new car, a once in a lifetime holiday or choose to treat your children to grandchildren.

At Equity Release Warehouse, we work with a number of lenders to find the very best equity release products and deals for you. Our team of specialists will talk to you on a number of occasions to make sure that you understand the process and all the pros and cons.

In order to find the best equity release deals for you, your equity release advisor will ask you a number of initial questions, regarding your savings, your pension, the value of your home and how much inheritance you plan on leaving your loved ones.

Due to this, it is a good idea to have a think about a few things so that you feel prepared for all the questions your equity release advisor will have.

Below is a list of a few things you should have a think about before your first meeting with an equity release advisor.

  • Whether or not you think that you will want to move home in the future
  • Whether you need money in one large lump sum or in a number of smaller payments (known as a drawdown mortgage)
  • How much money you really need right now
  • How quickly you need the money

All equity release plans in Swansea also benefit from something called a no negative equity guarantee.

This guarantee ensures that even if your property decreases in value by the time you pass away, your loved ones won’t be responsible for having to pay the loan using money from their own pocket.

This is the case even if the sale of the property does not cover the loan amount. The no negative equity guarantee ensures that the bank is liable to pay the difference, not your next one and next of kin.

If you need or want access to the equity that has built up in your home, then speak to a member of the team at Equity Release Warehouse.

We will be able to advise you on how the equity release process works from start to finish, as well as using our very own equity release calculator to work out how much equity you would be able to release from your home based on the current value of your home and your age.

If you are considering equity release in Swansea, it is important to talk to your adviser about the possible pitfalls of equity release, including the impact it might have on your ability to qualify for any state or council-funded benefits.

If you are aged 55 or over and are considering equity release in Swansea then get in touch with the Equity Release Warehouse team.

Please call our 24-Hour Helpline: 0330 058 1579

Equity Release in Swansea – Why Use Equity Release?

There are lots of different reasons why people turn to equity release in Swansea for financial help and support in later life. People might need to release equity from their home to help with the cost of living, or to treat themselves to a nice new car or once-in-a-lifetime holiday.

Whatever your reason is for wanting to release equity from your home, make sure that you are open and honest with your equity release adviser about why you want to release equity from your home so that they can recommend the best and most appropriate equity release plan for you.

Use Equity Release to Pay Off Your Existing Mortgage

A lot of people use their equity release money to pay off any existing mortgage. When you apply for equity release, you have to have paid off a lot of your existing mortgage in order to be accepted for an equity release loan.

However, if you still have a small amount of mortgage left then you will be accepted for equity release, whilst being expected to use your equity release money to pay off the remainder of your existing mortgage.

Please call our 24-Hour Helpline: 0330 058 1579

Use Equity Release to Pay Off Debts

A lot of people opt for equity release in Swansea because they suffer from debt. This does depend on what kind of debt you are in, though. You are more likely to be allowed to pay off unsecured debts than you are with secured debts. This will include things like bank loans.

Suffering from debt is never nice, but struggling from debt in later life is particularly hard as you will most likely no longer have a form of income, apart from your pension. This can make paying off debt extremely difficult and stressful.

If you suffer from debt, then you will most probably also suffer from a poor credit score. This means that you might struggle to get approved for other loans.

Please call our 24-Hour Helpline: 0330 058 1579

Use Equity Release to Increase the Value of Your Home

If you want to increase the value of your home, then using equity release in Swansea to make some home improvements can be a great idea. This will most likely increase the value of your home significantly, which will increase the chances of being able to leave a generous inheritance.

This is because when you opt for an equity release plan, particularly a home reversion plan, the funds from the sale of your house have to be used to pay off the equity release loan. This means that the amount of money that your loved ones inherit through the sale of your house will be reduced.

By using your equity release money for home improvements, you will be increasing the value of your home and therefore increasing the amount of money you are able to leave your loved ones and next of kin.

By using your equity release money for home improvements, you will also be able to make your home more comfortable for you and your family as you age. For example, you might choose to spend your money on fitting a stair lift, an extension to cater for grandchildren, handrails for ramps to make your home more accessible and future proof for you as you age.

Use Equity Release to Buy a Second Home

Some other people will use their equity release money to fund a second property. Whilst you are able to do so, there are a few restrictions in place.

In order to use your equity release funds on a second property, you must always ensure that your original property remains your main residence. This means that you must continue spending the majority of your time living in this property and not the second property.

If you are planning on using your equity release money in this way, then make sure you make this clear to your equity release advisor, as it will mean that they have to select certain plans in order to allow this.

If you are considering equity release in Swansea, make sure you speak to an equity release specialist about what you plan on spending your funds on first before making any decisions.

Please call our 24-Hour Helpline: 0330 058 1579

Equity Release in Swansea – The Housing Market

Thousands of people living in Swansea are currently considering equity release in Swansea due to the booming housing market. House prices in Swansea have been rising year on year, and rose by 16% between 2019 and 2020 [2].

Currently, the average price of a house in Swansea sits at around £194,826, with some detached houses in Swansea selling for as much as approximately £308,460 which is higher than the national average.

This means that a lot of people living in Swansea could be sitting on a significant amount of equity.

If you are considering equity release in Swansea, speak to the team at Equity Release Warehouse for advice and support.

Please call our 24-Hour Helpline: 0330 058 1579

What Percentage of Your Home Can You Borrow on Equity Release?

How much money you are able to release from your home in Swansea will depend on a number of different factors, including the value of your home, your age and your current state of health.

Most people are allowed to borrow a maximum of £100,000, or up to 60% of the value of their home. However, this figure will differ drastically depending on how old you are.

Typically, the older you are then the more equity you are allowed to release from your home. This is usually the case as the bank has a shorter wait until you pass away or move into a care home, which is when the loan will be repaid from the sale of your house.

If you are considering equity release in Swansea but are unsure of how much equity you might be able to borrow, then speak to a member of the team at Equity Release Warehouse.

Our friendly and helpful team will use our equity release calculator to work out how much equity you might be able to release from your home, and will talk you through the process from start to finish.

Please call our 24-Hour Helpline: 0330 058 1579

What Impacts How Much Equity You Could Release?

There are a number of factors that influence how much equity you are able to release from your home. Your equity release advisor and lender will take a number of factors into account when deciding how much money you are able to release from your home, which is all in your best financial interests.

For example, your lender will send someone out to view your property, so that they can establish how much your property is worth.

This will play a huge role in determining how much equity you are able to release from your home, so make sure that your house is in tip top condition before the bank comes to value your home!

Your age will also play a huge role in determining how much money you are able to release from your home. You have to be aged at least 55 years old in order to qualify for lifetime mortgages, and usually approximately 65 years old in order to qualify for home reversion equity release plans.

However, the older you are the more money you are allowed to release from your home. This is because the bank won’t have to wait long before getting their money back. This is why your health is also taken into account.

Please call our 24-Hour Helpline: 0330 058 1579

Equity Release in Swansea – Home Reversion Plan or a Lifetime Mortgage?

If you are considering equity release in Swansea, then you have to choose between lifetime mortgages and home reversion plans.

1. Lifetime mortgages

Lifetime mortgages allow individuals the chance to release a tax-free amount of money from their home. In order to qualify for a lifetime mortgage you have to be at least 55 years old, own your own home in the UK worth at least £70,000 and use that property as your main residence.

You also need to have paid off the majority of your properties pre-existing mortgage and be willing to use the funds you get from your equity release loan to pay off any existing mortgage that might remain on the property.

With lifetime mortgages you do not have to repay the loan whilst you live. The loan will be repaid once you pass away and your next of kin come to sell the house. This will also be the case if you have to move into a care home for health problems.

You will be charged interest on your lifetime mortgage, which will grow month on month into compound interest. However, you do have the option to pay off the interest on your loan to reduce the overall loan amount and interest paid.

Numerous studies have noted that lifetime mortgages are by far the most popular type of equity release loans across the UK [3].

2. Home reversion plans

Home reversion plans are the less popular form of equity release across the UK. In order to qualify for a home reversion plan, you have to be aged at least 65 years old, own your own home in the UK worth at least £70,000 and use that property as your main residence.

Home reversion plans work differently to lifetime mortgages. With a home reversion plan you do not pay any interest on your loan. Instead you have to sell a percentage of your home to the lender. As a result of this, you get access to the equity in your home.

However, when you come to sell your house your next of kin won’t receive as much inheritance, as you have already sold a percentage of your home to the lender, meaning that your next of kin will not receive the full loan amount after you pass away or move into a care home.

Please call our 24-Hour Helpline: 0330 058 1579

Equity Release in Swansea – The Importance of Professional Advice

When it comes to equity release in Swansea, professional advice is always advised and is even sometimes mandatory for some lenders. If you want to release equity in Swansea, then you should speak to a member of the team at Equity Release Warehouse.

Professional advice is so important because equity release is a huge commitment. By releasing equity from your home, you might be reducing the amount of inheritance you are able to leave your loved ones and next of kin.

Whilst there are no real restrictions on how you spend your equity release money, it is important that you pick the right equity release loan for you and your plans, especially if you choose to invest your equity release money.

Equity release advisers will be able to explain the process of equity release from start to finish. They will be able to simplify the process for you, whilst highlighting the pros and cons of equity release.

It is not the job of an equity release adviser to convince you that equity release in Swansea is a good idea.

You are expected to make your own decision when it comes to this. However, equity release advisers are there to provide you with all the information you need so that you can make a fully informed and financially savvy investment.

It is also normal for your equity release adviser to ask you a bunch of questions during the initial stages of the process.

This will ensure that they have all the information that they need to suggest the right type of equity release loans for you, and will be able to judge how much equity you should be able to release from your home, based on the information you have provided them with.

Your equity release adviser will also be responsible for helping you to apply for the equity release loan. They will draw up an illustration for you, which will highlight how much you are able to borrow, and how much you will have to repay during the entirety of your loan in interest.

It is important to remember that interest rates should be fixed or at least capped, so you should be able to see how much you have to repay for the entirety of your loan based on this illustration.

If you are considering equity release in Swansea, then the first thing that you need to do is speak to an equity release adviser at Equity Release Warehouse.

Please call our 24-Hour Helpline: 0330 058 1579

How Long Will the Equity Release Process Take?

If you are considering equity release in Swansea but are unsure on how long the process will take, then you should speak to a member of the team at Equity Release Warehouse.

If you are considering equity release in Swansea then the chances are you have bought a house in the past. If this is the case, then you will remember that things are always as straightforward or quick as you might hope when it comes to applying for mortgages.

Conveyancing on traditional mortgages can end up taking many months to process.

Equity release in Swansea can take anywhere between six weeks to three months, although this will depend on how complex your application is. If you need access to cash quickly, then equity release in Swansea might not be for you.

However, if you have the time and patience to wait a few weeks then you should consider it.

How long your equity release application takes to process will depend on how fast your solicitor works, and how long it takes for lenders to process your application and release your funds.

If you want more information on how long equity release takes to process, how the equity release process works and why it takes so long, then speak to a member of the team at Equity Release Warehouse.

Please call our 24-Hour Helpline: 0330 058 1579

How Much Does Equity Release in Swansea Cost?

Your equity release adviser will also explain to you that there are a number of costs involved when it comes to equity release in Swansea. Whilst most of these costs are one off set up costs, you also have to bear in mind that compound interest is by far the biggest cost associated with equity release in Swansea.

Taking out an equity release loan will cost you anywhere between £1,000 and £3,000, and this varies depending on who your solicitor and lender is.

You will have to pay for someone to come and value your property, which costs anywhere between £100 and £200, depending on who your lender is and what type of valuation they choose.

You will also have to pay for the cost of a solicitor, which can range between a couple of hundred pounds to a few thousand, depending on the complexity of your equity release loan and application.

Your solicitor will be responsible for drafting up your contract and exchanging the money into your account, so money towards a solicitor is money well spent

Please call our 24-Hour Helpline: 0330 058 1579

Speak to the Team at Equity Release Warehouse

If you would like more information on equity release in Wales, including Cardiff and Swansea, then the first thing that you should do is speak to a specialist advisor at Equity Release Warehouse.

Our team of professional equity release advisers will talk you through the process and work with you to see whether equity release is a feasible option for you.

Our team is not here to pressure you towards taking out an equity release loan. Instead, we will simply provide you with all the information you need to make a decision, and advise you on what types of loans are best for you considering your situation.

Start your equity release journey today by calling our team on 0330 058 1579 or by visiting our website: www.equityreleasewarehouse.com.

References

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

[2] https://www.rightmove.co.uk/house-prices/swansea.html

[3] https://www.researchgate.net/publication/259295497_Study_on_equity_release_schemes_in_EU_Part_I_General_Report

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