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Equity Release Schemes

Nov 06
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The Benefits Of Equity Release

By Equity Release

Equity release is a fantastic option for many homeowners when used correctly. By viewing different equity release plans, you can find the right plan, taking advantage of the benefits of equity release. Read on for some of the biggest benefits of releasing equity.

Essex Equity Release offer advice regarding all equity release plans. We can also make a recommendation so you have a good understanding of the best plan for your specifications.

Paying Off Existing Debts

As you get older, you want to make sure that any existing debts you have from earlier in life are dealt with and fully paid off. Therefore, you can enjoy the latter stages of life without worrying about repayments.

By taking out an equity release plan, you will receive a lump sum of money. Whether the debts you currently have are small or little, you can use this lump sum however you like. You could be left with a lot of money once debts are paid off or only a small fund. Either way, this can get a massive financial burden off your chest, completely clearing debts.

Live In Your Home Rent Free

Despite receiving money for part of your property’s value, you will never have to move out. This means you can live in your home rent-free until you and your partner pass away or move into long-term care. With money still available from the equity release plan, this can give you a very comfortable living situation.

The more common alternatives to equity release is to sell your home and downsize, get a loan or decide to rent for the rest of your life and sell your home. Equity offers a much more suitable options and means you can stay in a home that you love without monthly payments.

Tax-Free Money

Benefits of equity release also include all money being completely tax-free. Regardless of how much money you would like to receive in your plan, you will not be taxed for any of this. This makes it a great option to receive the highest amount of money possible, as long as the plan is suitable for your specifications.

No Negative Equity Guarantee

No negative equity guarantee is offered by all equity release schemes approved by the Equity Release Council. This means, when you sell your home, the amount of money you owe to your provider will never be more than the value you sell your property for.

Even if your outstanding debt is more than what the property is sold for, you will not have to repay it. This ensures that homeowners who release equity will never be left in debt. Additionally, no debt can be passed onto children and other family members.

Spend The Money How You Like

Once equity has been released, that money is yours to spend how you like. There are absolutely no restrictions on what you can do with it. Whether you want to help out family members, travel a bit more or just live with financial freedom, the choice is completely up to you.

This means you can live a lot more leisurely if you desire. Meanwhile, also having the option of how you would like to make repayments. This gives you a lot more financial stability and power so you no longer have to worry about money.

Contact Us

For more information regarding the benefits of equity release and whether it is the right option for you, book an appointment with Essex Equity Release today. You will receive a fast response from our team. We will organise a chat at your home, our office, via email or over the phone. Call us on 01268 799211 or fill in our contact form to make an enquiry.

Oct 22
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Common Mistakes When Releasing Equity

By Equity Release

Homeowners who are not experts in equity release may find the process hard to grasp, making costly errors. When used right, releasing equity is one of the best options for homeowners to unlock cash from your property. However, it is essential not to repeat common mistakes.

Essex Equity Release offer advice regarding equity throughout Essex and the surrounding areas. We always find the right plan for you, with no mistakes when releasing equity.

Using Equity For The Wrong Reasons

Equity release is a fantastic option for homeowners. However, if you are not releasing it for the right reasons then it can be a scheme you want to avoid. If you need extra finances, whether this is to be more financially stable, pay off a mortgage or debt, holiday or help out family members with money, then using equity release can be very useful.

Problems occur when some homeowners are talked into equity release by providers and only realise further down the line that it may not benefit them. It can be easy to be talked into equity release if you do not understand the specifications of your plan. Speaking to an unbiased equity release advisor is essential so you have good knowledge of the plans best for you and what the outcomes will be of choosing each plan.

Moving House or Downsizing

Homeowners often plan to move house or downsize in the future. Although some equity release plans are happy for homeowners to move house and continue with the plan, it is not that common and could leave you having to pay off more than you expect.

The amount you owe when your equity release plan ends will vary. If you decide to move house or downsize before the minimum length of your equity plan, this means you will have to pay an early repayment charge. Some plans will allow you to move home but this early repayment charge could cost you dearly. When looking to move home in the future, make sure the equity plan you choose allows you to do this.

With downsizing, you will also have to make an early repayment charge. If the home you downsize to is significantly lower in value, this could breach the criteria of your plan. As downsizing will give you suitable funds from the sale of your property anyway, releasing equity does not have to be a priority for these homeowners.

Not Getting Advice

Not getting advice is possibly the biggest mistake you can make before taking out equity release. Unless you are already an expert in equity plans, getting advice should be one of the first steps you take. This means you can view a range of plans and also receive a recommendation on what is best for you, not the provider.

Without advice, you may find a plan that is suitable but you could overlook some of the criteria. Getting advice should help you avoid this problem and make sure you are only choosing a plan that is perfect for your specific situation.

Not Using The Equity Release Council

You should only ever use plans that are fully approved by the Equity Release Council. This will make sure any plan you decide on has a No Negative Equity Guarantee. Therefore, you can never be left in debt after repayment has been made. Family will also not receive this debt.

Essex Equity Release are members of the Equity Release Council and will provide plans that are suitable and safe.

Contact Us

Make sure you avoid common mistakes when releasing equity and contact Essex Equity Release today. You will receive a fast response, organising a consultation at a suitable time for you and any location you require. Call us on 01268 799211 or fill in our contact form to make an enquiry.

Oct 08
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How Has Equity Release Evolved?

By Equity Release

Equity release has significantly grown in popularity over the past 3 decades and is now a very sustainable and safe option for homeowners. There are several differences in equity schemes to when they were first made available and why they are now such a good option.

Essex Equity Release provide advice to all homeowners. We work with a number of providers to deliver the best schemes and plans for you.

What Was The Problem With Equity Release?

Equity release schemes have been available in the UK for over 30 years. Beginning in the 1980s, the products and schemes that were available caused problems for future development. The schemes that caused difficulties were home income plans. It was predicted the plans would bring significant reward for homeowners, as property value world increase and inflation would be higher than mortgage interest rates.

Homeowners were also advised to invest their money from equity release into stock market bonds. However, this produced poor results. As interest rates rose and property values fell, it left many homeowners to have growing debts due to equity release, rather than being a successful scheme to help homeowners.

Despite this, these schemes are no longer the same. Equity release is a much safer and more beneficial option for homeowners and will provide you with the financial security you desire.

Difference In Opinions

Due to the plans that were available in the 1980s and early 1990s, it meant there was no cap on interest accrued. Homeowners could end up owing everything from the sale of their home and having debt after that.

Nowadays, plans that have been approved by the Equity Release Council ensure there is a no negative equity guarantee. This means the repayment will never be larger than the value your property is sold for. There is never any debt for both homeowners and their children or family members, giving you complete peace of mind over the safety of equity release.

You will also have the option to protect any inheritance you want to leave from the equity release plan, along with leftover funds from the property sale.

How Has Equity Changed?

Equity has changed so there are now two types of popular equity schemes. These are lifetime mortgages and home reversions. Lifetime mortgages mean you do not have to make repayment whilst you are alive or living in your home. The interest will roll up and only has to be repaid when both you and your partner pass away or move into long-term care. This means the house can be sold before any repayment is needed.

Home reversions are slightly different, as you sell a part of your home. A lender will purchase a percentage of your home. When the property is sold, the lender will receive the value for the percentage of the property purchased. The payment you receive could be lower than market value for your home. When it comes to being sold, the lender could receive more money.

Equity Release Plans Today

As of 2017, £3.06bn was extracted from properties according to the Equity Release Council. Increasing by £909m in 2016, this demonstrates the growth in popularity and the reliability of using equity plans in the modern age.

Equity plans have also become more varied, giving you more options suited to all individual specifications. As equity continues to drop in price, you can find beneficial plans for your finances. Meanwhile, you do not have to spend too much money now or in the future.

Contact Us

For more information regarding equity and why this is a safe option for you, contact us today. Essex Equity Release will always provide a fast response, organising a suitable time to visit you at an ideal location. Organise a consultation today and call us on 01268 799211 or fill in our contact form to make an enquiry.

Jul 29
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What Is A Lifetime Mortgage?

By Lifetime Mortgages

A lifetime mortgage is the most popular plan available when you are considering equity release. Understanding what a lifetime mortgage is, is essential to make sure you choose the right plan for your exact specifications. Our advisors can always give you the information and equity plans you need.

Essex Equity Release provide unbiased advice throughout Essex and the surrounding areas. With our team, you have a dependable option for advice regarding equity plans and a lifetime mortgage.

How A Lifetime Mortgage Works

Lifetime mortgages are the most popular option for homeowners looking to release equity. A lifetime mortgage will, usually, last the course of a homeowner’s life. However, there can be exceptions. For example, if you move home and the equity plan criteria does not allow this, repayment will be required. Alternatively, the plan will end if both you and your partner move into long-term care, leaving your home vacant.

Once this happens, the lifetime mortgage will be repaid as one lump sum with the built up interest. Despite this, more and more lifetime mortgages are becoming available where monthly and voluntary repayments are available. As the payments are flexible, you have many more options to find the cheapest plan for your needs.

With all money released during an equity plan, this is tax-free, ensuring you always receive the exact money withdrawn from your home. Our lifetime mortgages also contain a No Negative Equity Guarantee, ensuring you are never left in debt after releasing equity.

Am I Eligible For Lifetime Mortgages?

Depending on the criteria of each equity plan, the amount of money you can borrow will vary, as well as whether you can choose a particular plan. Each provider will have their own rules for who can use their equity plans as well as how much can be released. To be eligible for any lifetime mortgages, you must follow some criteria, including:

  • Minimum Age of Youngest Homeowner Is 55
  • Minimum Property Value Is £70,000
  • Specific Health & Lifestyle of Homeowners

If you have a qualifying medical condition or multiple conditions, this means you could potentially borrow more money. The money you can release and the eligibility for every homeowner is specific to the lifetime mortgages equity release plan that is available. You should always gain information and specifications of multiple plans to find the right option.

Types Of Lifetime Mortgages

Whilst a lifetime mortgage is a type of equity plan, there are several types of lifetime mortgages that you can consider and choose from. As lifetime mortgages have continued to grow in popularity, a variety of different plans have been made available. This includes:

Enhanced Lifetime Mortgage – These plans are based on your health and lifestyle, allowing you to borrow more money or have a lower interest rate. Life expectancy can be used to calculate the maximum equity release, potentially finding you the best plan.

Drawdown Lifetime Mortgage – This equity plan can provide a lower interest rate, as you do not take the maximum amount from equity release. This leaves a cash reserve with the provider if you potentially need more money in the future. As you only take a part of what could be released, this gives you a lower interest rate and repayment.

Interest-Only Lifetime Mortgage – Interest-only plans will allow you to make monthly repayments. Whilst these plans are usually for life, if you would rather make a monthly payment and prevent interest rolling up, this could be the best option for you.

Voluntary Repayment Plans – Similar to an interest-only plan, voluntary repayments allow you to pay up to 15% of what you borrow each year with no early repayment charges. This means the equity can be repaid within a few years and not when your home is sold. Voluntary repayments are also called ad-hoc payments.

With a lifetime mortgage, you will always have the choice between allowing your interest to roll-up or paying your interest as the plan is in motion.

Contact Us

For more information regarding lifetime mortgages and what option is best for you, get in touch with Essex Equity Release . You will always receive a fast response from our team, organising consultation at a suitable time for you with the easiest method. Make an enquiry and call 01268 799211 or fill in our contact form today.

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