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Equity Release in Wolverhampton

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Equity Release in Wolverhampton

Whilst lots of people have heard about equity release, they might not understand what equity release in Wolverhampton really is. Put simply, equity release is an easy and stress free way of gaining access to the equity in your home.

Using the equity in your home to achieve this allows individuals the chance to gain access to their hard earned cash, all tax-free.

This means that nothing will be deducted from the agreed amount – every penny will be sent to your bank account and there won’t be any upsetting surprises.

There are lots of different types of equity release in Wolverhampton and the rest of the UK. For example, one of the most popular types of equity release in Wolverhampton is a lifetime mortgage.

With this type of mortgage, you do not have to repay a single penny of your loan until you pass away or move into a care home. This means that you can enjoy your tax-free amount without having to worry about any monthly repayments.

By opting for equity release in Wolverhampton, you can enjoy your retirement in comfort. There are lots of different ways people enjoy their equity release funds.

For example, lots of people choose to use their money on some home improvements – such as an extension. Not only will this improve your quality of life, but it will also increase the value of your home in the future as well, as will mean more inheritance for your loved ones.

Others spend their equity release money on other people, choosing to help their children and grandchildren with the cost of University fees or house deposits. Others choose to blow the money on a dream holiday.

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Will I Qualify for Equity Release in Wolverhampton?

If you have liked what you’ve read so far, then you might be wondering if you’d even qualify for equity release in Wolverhampton in the first place.

Lots of people presume that they would be unable to qualify for equity release, due to a number of reasons. However, millions of people qualify for equity release every year, and you might be pleasantly surprised.

If you are hoping to qualify for equity release in Wolverhampton to throughout the rest of the UK, then you must be aged over 55 for a lifetime mortgage and over 65 for a home reversion plan.

When it comes to equity release in Wolverhampton, the older you are the more likely you are to be accepted; and the more money you will be able to release, too.

If you want to qualify for equity release in Wolverhampton, then you will also need to own your own home in the UK.

Not only this, but your house also has to be valued at a minimum value of £70,000.

House prices in Wolverhampton have been on the rise for a number of years [1], so it is highly likely that your property will be worth more than £70,000 if you own a detached or semi-detached property in Wolverhampton.

It is important to understand that whilst there is a minimum limit to how much your property must be worth, there is no maximum limit, although you might be restricted by some lenders if your property is worth more than one million pound.

In order to qualify for equity release in Wolverhampton you must also have a significant amount of equity in your home and must have paid off a large proportion of your mortgage.

If you still have a small amount of mortgage left to repay, then you will be asked to use your equity release money to pay off your mortgage before you spend the money on anything else.

Across Wolverhampton and the rest of the UK, lenders will only allow you to release equity from your home if you have paid off the majority of your mortgage, and will only allow you to release a minimum of £10,000 from your home.

If you want anything less than this, then you will need to talk to your financial advisor about other options.

If you are considering equity release in Wolverhampton, then speak to one of our advisors at Equity Release Warehouse as soon as possible to kickstart the process and to get more advice.

Please call our 24-Hour Helpline: 0330 058 1579

What Can Equity Release in Wolverhampton Be Used For?

The great thing about equity release in Wolverhampton is that any cash you receive will be tax-free.

Not only this but there are no real restrictions on what you are allowed to spend your equity release money on.

There are a few common reasons why people release equity from their home, some of which are listed below:

  • Repaying your existing mortgage on your property or another property
  • Paying off unsecured debt
  • Home improvements
  • Home extensions
  • A second home
  • Paying off any large tax bills
  • Paying court fees
  • Paying any health or medical bills
  • Paying for a holiday
  • Paying for a new car
  • Paying for a loved one’s University fees
  • Paying for a loved one’s house deposit

When you first speak with your equity release advisor, it is important that you are open and honest about your reasons for wanting to release equity from your home.

This is because it could inform and alter which scheme they recommend for you.

Most people aged over 55 years old consider equity release because they want to repay a mortgage or carry out some improvements.

These would both be deemed sensible reasons for releasing equity from your home and it is important that your motivations are sensible and financial savvy.

If you are considering equity release in Wolverhampton, take the first steps today by getting in touch with Equity Release Warehouse.

Please call our 24-Hour Helpline: 0330 058 1579

Are There Really No Restrictions on How I Spend My Equity Release funds?

There are no real restrictions when it comes to spending your equity release funds, providing that everything you want to do is legal.

Nevertheless, depending on which lender you choose to go with, you might be restricted in certain areas. It is important to understand that these restrictions are only ever in place to protect you, your finances and the lender from any financial difficulties.

If you are questioning whether you would be allowed to spend your equity release on something, it is always best to check with your equity release advisor first.

There might be some restrictions on your equity release plan if you wish to spend your money on any of the following things:

  • Investments – if you want to use your equity release money on personal investment, then it is recommended that you seek independent legal and financial advice. This is mainly due to the fact that your investment might earn you less than the amount of interest that compounds on your equity release loan.
  • Helping others – if you want to spend your equity release funds on helping others, you will need to make your equity release advisor aware of this. This is because it could put you in a difficult financial situation if you give your money away but will have interest to pay on the loan.
  • Carers and health care plans – if you want to fund your health and care plan with your equity release money, then you will need to speak to a specialist care advisor who can advise you on the different types of care plans available to you with your funds.

If you want to use your equity release funds on any of the above things in Wolverhampton, then make sure you speak to an equity release advisor and any other necessary specialists in order to ensure that you are making a wise investment.

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What Are The Differences Between the Types of Equity Release in Wolverhampton?

There are lots of different types of equity release plans across Wolverhampton and the rest of the UK. The two main popular types of equity release in Wolverhampton are lifetime mortgages and home reversion plans which are explained further below, along with lump sum mortgages and drawdown mortgages.

1. Lifetime Mortgages

Lifetime equity release mortgages are available to anyone who is aged 55 or over and owns their own home in the UK worth £70,000 or more. Lifetime mortgages allow people to borrow equity from their home whilst remaining the sole owner of the home.

You have to pay interest on the loan, but only have to repay this when you pass away or move into a care home. The interest and loan will be paid back using the money made from the sale of your house.

You should consider a lifetime mortgage if you still want to own the entirety of your home and do not want to sell any percentage of your home to the lender.

You should also consider a lifetime mortgage if you want to steer away from any monthly repayments. You can even opt to pay back some of the interest on the loan each month, to avoid it compounding into a large amount.

By opting for a lifetime mortgage, you will also benefit from a no-negative equity guarantee which means that your loved ones won’t need to pay off any of the loan when you pass away.

Lifetime mortgages are really popular across Wolverhampton and the rest of the UK. In fact, there are now a number of different types of equity release lifetime mortgages which offer a range of different features.

For example, one popular form of equity release lifetime mortgage is a lump sum lifetime mortgage.

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2. Lump-sum lifetime mortgages

Lump sum mortgages is a form of lifetime mortgage which allows you to gain access to one single, large lump sum which is tax-free. In fact, according to the Equity Release Council, 43% of all equity release plans were lump sum lifetime mortgages [2].

By choosing a lump sum lifetime mortgage, you can spend the money on whatever you want, including home improvements or a holiday.

You will also benefit from a fixed interest rate, but will need to repay this interest either on a monthly basis or when you pass away and sell the house.

3. Drawdown lifetime mortgages

Drawdown lifetime mortgages are another form of equity release which allows individuals to release equity which is secured against your property.

However, a drawdown lifetime mortgage allows individuals to receive their money in stages rather than one large lump sum.

It is important to understand that with a drawdown lifetime mortgage, you will only be charged interest on the money that you withdraw from your home, rather than the whole amount all at once. This will hopefully reduce the amount of interest that compounds on your loan.

However, it is important to understand that with a drawdown lifetime mortgage, you will get a new, fixed interest rate each time you withdraw a new part of the pot, which might change depending on when you withdraw the money.

If you are considering equity release in Wolverhampton, then you should carefully consider whether a drawdown lifetime mortgage is right for you or not.

Please call our 24-Hour Helpline: 0330 058 1579

4. Interest-only lifetime mortgage features

In addition to this, some other types of lifetime mortgages allow individuals to pay off the interest on their mortgage monthly. This is called an interest-only lifetime mortgage.

The payments are completely voluntary and you do not have to repay the interest back at all, but some choose to as this helps them to avoid the effects of compound interest.

As you continue to pay off the interest on your loan, the overall loan amount will be reduced.

It is important to remember that as long as your lender and advisor is a members of the Equity Release Council then you should benefit from a fixed or capped interest rate which should not move over the years.

Please call our 24-Hour Helpline: 0330 058 1579

5. Home reversion plans

A home reversion equity release plan is a much less popular option with people living in Wolverhampton and the rest of the UK.

With a home reversion plan, you are allowed to sell a percentage of your house so that you can withdraw some of the equity in your home.

Once again, the equity you receive will be tax-free and you will either be able to receive your money all in one or in a number of smaller sums.

The great thing about equity release home reversion plans is that although you have sold some of your property back to the lender, you will be able to remain living in your home for as long as you want, and you will not be asked to move or leave.

When you pass away or move into a care home, your property will be sold to your next of kin and the percentage you sold to the lender will be deducted from the value of the house.

For example, if you sold 90% of the property to the home reversion lender, then your next of kin will only receive 10% of the house share, minus the interest that has compounded.

In addition to this, when you choose a home reversion plan, you will only be able to sell a percentage of the property to the lender for less than market value.

This means that you won’t get as much money than if you sold the property on the housing market traditionally.

If you are considering equity release in Wolverhampton, then speak to a member of our team at Equity Release Warehouse to see whether a home reversion plan is right for you or not.

Please call our 24-Hour Helpline: 0330 058 1579

Equity Release, Debt, Inheritance and Tax Benefits

Unfortunately, when it comes to equity release in Wolverhampton, there are a few drawbacks.

Just some of these drawbacks is that when you opt for an equity release loan, your ability to receive any tax benefits in the future is affected as will your inheritance.

The Equity Release Council ensures that every equity release plan across Wolverhampton and the rest of the UK benefits from a no-negative equity guarantee and a fixed or capped interest rate.

This means that you should know exactly how much you will have to pay back in interest for the rest of your loan, and that your next of kin and loved ones will be protected after you pass away.

This means that even if your house decreases and drops in value significantly and no longer covers the cost of the loan, your family will not be liable to pay.

However, if you do allow your interest to build up and compound over time, then the amount of money you leave your loved ones and next of kin will be negatively affected.

This is also true if you opt for a home reversion plan, as you will have sold a part of your home in return for your equity.

It is important to speak with your next of kin and loved ones about your equity release plans, so that they know exactly what they are to expect in the future.

When you choose equity release in Wolverhampton, any tax benefits you receive might change.

This includes any means-tested or welfare benefits, which does include anything like your pension credit or any other financial support you receive from your council and the Government.

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

Please call our 24-Hour Helpline: 0330 058 1579

Equity Release Council – What Do They Actually Do?

The Equity Release Council has been discussed previously on this page. The Equity Release Council is responsible for setting standards across the equity release industry.

They do this to make sure that everyone is being given financially responsible equity release loans.

They are constantly adding to their list of standards which is a great thing, as it ensures that the council is up to date with all of the different products that are currently being offered across the UK by a range of different lenders.

The Equity Release Council were responsible for making sure that all equity release loans benefit from fixed interest rates and no negative equity guarantees.

They will also ensure that if your interest rate is not fixed, that it is capped at a certain amount and will never go over this amount.

The Equity Release Council also ensures that all equity release loans last for as long as the homeowner lives and that you do not need to repay your loan until you pass away and your house is sold.

You will also be able to sell and move your house if you choose to, but your house must be your main residence until you choose to. If you do want to move house in the future then your new lender will need to accept the terms of your equity release plan.

The Equity Release Council also asks that all individuals who are considering equity release in Wolverhampton seek the help and advice of an equity release advisor before making any commitments.

If you want to use your equity release money for certain things, then you will also need to seek the help and advice of an independent financial and legal advisor.

By speaking with an equity release advisor you are not forced into making a decision, you are simply gathering information to help to inform your decision.

When you are considering equity release in Wolverhampton, it is important to speak with your equity release advisor about the associated costs of equity release, the need for a solicitor, how long the process takes from start to finish and how a changing housing market, either a crash or spike might affect your inheritance and your loved ones.

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How Long Does the Process Take?

Lots of people who are considering equity release in Wolverhampton might wonder how long the process takes from start to finish. Equity release does take a number of weeks and months to process, which is why it might not be a suitable option for everyone.

Most equity release plans take approximately 8 – 10 weeks to process from start to finish, although this does depend on the size and complexity of your equity release plan. You will need to engage your solicitor as quickly as possible to get the ball rolling.

Just as with buying a house, there is very little often individuals can do to speed up the process, such as paying more money.

Unfortunately, this is very much left in the hands of your provider, equity release advisor and lawyer.

If you are considering equity release in Wolverhampton, speak to our team at Equity Release Warehouse for help and support.

Please call our 24-Hour Helpline: 0330 058 1579

How Much Equity Am I Allowed to Release from My Home?

The amount of money you are allowed to release from your home in Wolverhampton depends on a number of different things – and therefore differs from person to person.

Most people are allowed to release anywhere between 20% and 50% of the total value of your house. However, you will need to have paid off the majority of your mortgage in order to do so, and must be in good health.

You are never allowed to release anything less than 10% of your house, or anything less than £10,000.

There is no upper limit to how much equity you are allowed to release from your home in Wolverhampton or anywhere else in the UK.

However, if your property is worth more than one million pound then you might need the help of a specialist advisor and a particular type of lender.

The best thing about equity release in Wolverhampton is that any money you receive will be tax-free – which means you get to keep every penny!

Please call our 24-Hour Helpline: 0330 058 1579

How to work out how much equity you have in your house?

When you first speak to an equity release advisor in Wolverhampton, they will work out how much equity you are allowed to release from your home using their very own equity release calculator.

If you want to work out how much equity you have in your Wolverhampton home and how much you want to release from your home, then you will need a recent valuation of your house to work out how much your house is now worth. You will also need to work out how much of your mortgage is left.

You then need to minus how much is left on your mortgage from the value of your home. Whatever you are left with is how much equity you have in your home.

There are lots of different ways you can get a very rough estimate of your online property value.

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How Does Your State of Health Affect Equity Release in Wolverhampton?

When you apply for equity release in Wolverhampton, your equity release advisor will ask you if you are currently suffering from any health issues.

If you do have health concerns, then you might need to opt for an enhanced lifetime mortgage instead of a lifetime mortgage or a home reversion plan.

This is because how much equity your lender is willing to lend you depends very much on how long they think you are going to live, and therefore how long it will be for the loan to be repaid.

Below is a list of some health and lifestyle issues that might increase how much equity you are able to release from your home if you qualify for an enhanced lifetime mortgage across Wolverhampton or the rest of the UK.

  • High blood pressure
  • Diabetes
  • Heart conditions
  • Cancer
  • History of a heart attack
  • Being overweight
  • Whether you smoke or not
  • Whether you suffer from Parkinson’s

If you are suffering from one of the above health conditions and are considering equity release in Wolverhampton, then you should speak to a member of the team at Equity Release Warehouse for advice and support on what type of equity release scheme you should opt for.

Please call our 24-Hour Helpline: 0330 058 1579

References

[1] https://www.plumplot.co.uk/Wolverhampton-house-prices.html

[2] https://www.equityreleasecouncil.com/wp-content/uploads/2022/01/210124-Equity-Release-Council-Q4-and-FY-2021-market-statistics-media-alert-FINAL.pdf

 

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