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Lifetime Mortgage & General Equity Release Advice in Wales
Reviewed by Tom Philips
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If you are considering equity release Wales, then it is important to understand how equity release works, the different loans you might be able to apply for and how the Equity Release Council informs and monitors the industry.
Equity release Wales is becoming an increasingly popular option for people aged over 55 years old. Essentially, equity release is another type of mortgage. However, unlike with a typical mortgage, you do not have to make any monthly mortgage repayments.
Instead, with an equity release loan in Wales, you are able to gain access to the money that’s already built up in your home without having to make any monthly mortgage repayments.
There are a few different types of equity release across the UK, with the most popular being lifetime mortgages and home reversion plans.
With lifetime mortgages you remain the sole owner of the property. However, with lifetime mortgages you have to sell a percentage of your home in order to gain access to your equity.
Nevertheless, with both equity release loans in Wales you are able to remain living in your home for as long as you want to. You do not have to make any monthly repayments in order to do so, and you only have to sell the house when you pass away or move into a care home.
When you do pass away or move into a care home, your next of kin will have to sell your house and use the money from the sale of the property to pay off the equity release loan.
As a result of this, your next of kin(s) simply won’t receive as much inheritance as they might have once hoped.
However, it is important to remember that like with any loan, you will be charged interest. Like with an ordinary loan, your interest will build up over time and turn into compound interest.
This means that your overall loan amount will increase, and you will therefore be charged more interest. This cycle will continue and does have the ability to get out of control.
This is why most equity release lenders in Wales allow borrowers to pay off the interest on their loan each month, if they choose to. This will allow them to avoid compound interest and keep their overall loan amount down [1].
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If you are considering equity release Wales, then it is important to understand that the equity release industry is monitored by the Equity Release Council, which allows them to ensure that all lenders and products are of a certain standard. This means that all lenders and products are safe, transparent and fair.
The Equity Release Council also ensures that all equity release plans in Wales benefit from a no negative equity guarantee.
This means that your next of kin will be protected after you pass away, and won’t have to make any payments even if your house sells for less than the loan amount and doesn’t cover the cost.
It is also important to understand that despite what many people think, when you take out an equity release loan in Wales you are still allowed to move house, if you want to.
Whilst many people take out an equity release loan because they simply do not want to move house, others have no choice but to move house if their circumstances change.
With an equity release loan in Wales, you are able to move house in the future as long as your new lender accepts your equity release loan agreement. It is always worth checking which lenders across Wales would accept your loan agreement before choosing to move.
If you want more information on equity release in Wales, then it is important to seek the advice of professionals. There are many equity release advisers out there, but it is important to seek advice from highly qualified professionals, who are ideally monitored by the Equity Release Council.
You should set up a meeting with an equity release advisor in Wales before making any final decisions. Your adviser should talk through the ins and outs of equity release, and work out how much equity you are able to release from your home.
At Equity Release Warehouse, we also think it’s a good idea to talk to your next of kin(s) before making any decisions when it comes to equity release.
This is because taking out an equity release loan will affect them and their inheritance, which is why it’s important to make sure that they are fully aware of your decisions and are on board with it.
As previously mentioned, there are two main types of equity release loans across Wales. These are called lifetime mortgages and home reversion plans.
Whilst both plans allow you to remain living in your home whilst enjoying access to the equity in your home, there are some differences between the two which are explained further below.
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Thousands of people across Wales are considering using lifetime mortgages to gain access to the equity in their home.
With lifetime mortgages, you will remain the sole owner of your property, do not have to make any monthly repayments and are able to remain living in your home for as long as you want.
Your loan is secured against your property with lifetime mortgages, and when you come to sell your house after you pass away or move into a care home, the proceeds from the sale will pay off the equity release loan.
Unfortunately, with lifetime mortgages you are charged a lot of interest. In fact, with most equity release loans you are charged more interest than you are with ordinary loans and traditional mortgages.
This is why a lot of equity release lenders allow individuals to pay off the interest on their equity release loan as they go, to avoid the build up of compound interest.
This will reduce the overall loan amount, and also increase the amount of inheritance you are able to leave your loved ones after paying off the loan with the sale of the house.
With lifetime mortgages in Wales, you can choose to gain access to your money in one large lump sum, or through a number of smaller payments. Which option you choose will depend on what you wish to spend your equity release funds on.
With equity release loans across Wales, you can spend the money however you want.
However, by choosing to gain access to your money in frequent, small payments you will only be charged interest on the money you release in stages, which might reduce how much interest you have to pay.
If you would like more information on lifetime mortgages across Wales, then speak to a member of the team at Equity Release Warehouse.
In order to qualify for a lifetime mortgage in Wales, you will have to be aged over 55 years old, own your own property worth at least £70,000 and use that property as your main residence [1].
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Home reversion plans are used throughout the UK a lot, but are a lot less popular than lifetime mortgages.
This is because when someone opts for a home reversion plan in Wales, they have to sell a percentage of their house before gaining access to their money. This means that once they come to sell their house, they have to sell the percentage that they sold to the lender.
Substantially, this means that your next of kin and loved ones won’t receive as much inheritance as they might want to.
In addition to this, when someone opts for a home reversion plan and sells a percentage of their home to the lender, they have to sell it for less than the market value of their home. This means that you shouldn’t expect to get as much money as you would if you sold it on the housing market.
However, by opting for a home reversion plan in Wales you get to remain living in your home, whilst enjoying extra funds from your equity. Even though you have sold a percentage of your home, you won’t ever be asked to move or sell up.
As with a lifetime mortgage, you can ask to gain access to your money in one large lump sum or a number of smaller payments, called a drawdown mortgage.
If you want to talk to someone regarding an equity release home reversion loan in Wales, then speak to someone at Equity Release Warehouse.
However, in order to qualify for an equity release home reversion plan then 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 house as your main residence [1].
If you are considering equity release in Wales but are confused about the differences between lifetime mortgages and home reversion plans, then speak to someone at Equity Release Warehouse for help and support.
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Unfortunately, by opting for equity release then it is important to know that it can affect your entitlement to benefits, now and in the future.
This will particularly affect any means-tested benefits you are currently entitled to, which could include pension credit, jobseekers allowance, any income support or universal credit [2].
If you are currently receiving access to any of these benefits in Wales, then you will need to tell your equity release adviser during one of your first meetings with them.
They will use their equity release calculator to work out how much equity you would be able to release from your home, and how this would subsequently affect any benefits you are entitled to [2].
If you opt for equity release in Wales, then you will have to pay a number of set up costs and fees. This will include management and set-up fees, as well as the cost of an advisor and a solicitor.
According to the Money Saving Expert, You will have to pay a solicitor anywhere between £1,500 and £3,000, depending on the complexity of your loan and how much equity you are planning on releasing [3].
In order to establish how much equity you are able to release from your home, the lender will need to work out how much your home is currently worth. To do so, they will send someone out to value your house. This person will examine the exterior and interior of your home, to look out for any damage. They will take note of any wear and tear or damage to the structure of the property, such as subsidence.
You will have to pay for this valuation, which can cost anywhere between £100 and £200.
It is important not to forget that you will also be charged interest on your equity release loan. If you leave this interest to compound, it could add a huge amount to your loan. This is why at Equity Release Warehouse we advise that you pay off your interest each month, to avoid it building up and compounding.
If you are considering equity release in Wales but want more information on how much equity release costs, then talk to our team at Equity Release Warehouse. Our initial consultation is free, so make sure that you ask about any future costs and fees during this initial consultation.
Because equity release is not the cheapest way of borrowing, we advise you to learn the alternatives before you go forward with your application.
can better manage your budget. Below, we list organisations that may be able to help in Wales:
Address: 35 Grosvenor Rd, Wrexham LL11 1BT
Telephone: 01978 364639
Website: https://wrexhamcitizensadvice.com/
Address: 23 High St, Denbigh LL16 3HY
Telephone: 01745 814336
Website: https://www.citizensadvice.org.uk/local/denbighshire/contact-us/
Address: Cable St, Connah’s Quay, Deeside CH5 4DZ
Telephone: 0808 278 7923
Website: https://www.flintshirecab.org.uk/
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As previously mentioned, the equity release industry is monitored by a body called the Equity Release Council. This is the case across England, Scotland and Wales. This council ensures that all products and lenders are playing by the rules, and only offering fair and legal products to customers.
They ensure that all lenders implement things like no negative equity guarantees. They also ensure that most lenders offer fixed interest rates, and if they are unable to then they at least offer a cap on all interest rates for as long as the loan lasts.
The Equity Release Council also ensures that individuals who take out an equity release loan are never asked to leave their home. However, this is only the case if the property in question remains your main residence.
The Equity Release Council also makes sure that everyone who takes out an equity release loan in Wales seeks independent financial and legal advice before completing their loan.
This is particularly important to make sure that all individuals are fully aware of the process and pitfalls of equity release before going ahead.
Your equity release advisor has a number of things that they need to go over with you during your initial meetings, according to the Equity Release Council standards.
Below is a list of things your advisor should go over with you before applying for an equity release loan on your behalf.
If you would like more information on equity release in Wales, then speak to a member at Equity Release Warehouse. If you would like more information on the Equity Release Council, then visit their website at www.equityreleasecouncil.com.
Please call our 24-Hour Helpline: 0330 058 1579
Unfortunately, there are a number of unhelpful myths surrounding equity release in Wales. This is because equity release has been around for a number of years now, and has changed a lot in that time.
To start with, the Equity Release Council has not been around forever, and they have changed and adapted lots of aspects of equity release in the meantime.
Because of these changes, there is now a lot of confusion and misinformation surrounding equity release. T
his means that a lot of people who would benefit from equity release in Wales simply do not think that it is feasible for them due to either a lack of information or the wrong information. Some of these myths are listed and explained below.
One of these myths is that by opting for equity release in Wales, you are denying your loved ones an inheritance.
Whilst the amount of money you leave your loved ones might be reduced by choosing equity release, there are still ways of ensuring that you leave them some money. For example, choosing to pay off your interest each month will ensure that you leave your loved ones some money in inheritance.
Another unhelpful myth surrounding equity release in Wales is that you aren’t allowed to sell your house. However, this simply is not true.
The Equity Release Council ensures that everyone is allowed to sell their house if they truly want to, as long as the lender accepts your equity release loan.
You are also able to remain living in your home for as long as you want, and will never be asked by your lender to sell up, as long as you stick to the agreements in your contract.
Unfortunately, lots of people think that if you want to qualify for equity release then you have to still be earning money. However, this is not the case. In order to qualify for equity release in Wales, you simply need to be aged 55 or over and own your own property in the UK worth at least £70,000. This house must also be your main residence.
How much money you can release from your home doesn’t depend on how much you earn or how much you have in savings. However, it does depend on your age, your current health and the value of your property.
If you are confused about the myths surrounding equity release in Wales, speak to the team at Equity Release Warehouse. We will never put any pressure on you to make a decision, we will simply provide you with the information you need to make your own informed decision.
Please call our 24-Hour Helpline: 0330 058 1579
If you are considering equity release in Wales, then it is important to get to grips with the process of equity release so you know what to expect. Whilst many people might think that the equity release process is confusing, it is actually quite simply once broken down into stages.
At Equity Release Warehouse, we have taken this chance to simplify the equity release process for you and explain exactly what happens at each stage.
If you want more information on equity release in Wales, then you will first need to seek the advice of an equity release specialist and advisor. At Equity Release Warehouse, we provide a free initial consultation where you can ask a number of questions about the equity release process.
If you wish to go ahead, then another meeting will be arranged so that we can work out how much equity you will be allowed to release from your home.
Our highly qualified advisors will then draw up an equity release illustration, unique to you. This illustration will lay out exactly how much equity you will be releasing from your home, and how much you will be expected to pay back in interest.
You will also need to engage a solicitor at this stage, so that they can draft contracts and deal with the lender.
The second stage of the equity release process is to apply for the equity release loan. Your equity release advisor and solicitor will help you to do this, and will also help you to fill out the application form with the chosen lender.
Unfortunately, there will be a lot of paperwork for you to complete. However, rest assured that it will all be worth it.
Once your chosen lender has received the application, they will arrange for someone to visit your home to complete the valuation. This is your chance to show off your home, so make sure that it is looking its best.
If you would like a rough idea of how much your house could be worth, then there are a number of online tools to use such as Rightmove or Zoopla.
You will then have to wait for your equity release process to be approved. As you will remember from the purchase of your house, this part of the process can take a number of weeks.
During this time you should spend some time making sure that you have read through all the terms and conditions and make sure you know what you need to do to stay in your contract.
Once your application has been approved, your solicitor will be the person to transfer your funds from the bank and into your account.
Please call our 24-Hour Helpline: 0330 058 1579
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 will talk you through the pros and cons of equity release, as well as the equity release process, to paint an accurate and thorough picture.
It is not our job to convince you to release equity from your home, and our team will never put any pressure on you to make a decision. We are simply here to provide you with the necessary information.
Start the process today by giving us a call on 0330 058 1579 or by having a look on our website by going to www.equityreleasewarehouse.com for more information.
All advisors we work with are regulated by the Financial Conduct Authority. This means you are covered under the Financial Services Compensation Scheme, and you lodge a complaint with the Financial Ombudsman Service (FOS) if you are unhappy about the advice you receive in relation to equity release.
All lawyers are regulated by the Solicitors Regulation Authority. If you are unhappy about the legal advice you receive in relation to equity release, you can lodge a complaint with the Legal Ombudsman.
[1] https://www.equityreleasecouncil.com/what-is-equity-release/
[2] https://www.equityreleasewarehouse.com/help-centre/how-equity-release-affect-state-pension/
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