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Releasing Equity

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.

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.

5 Reasons To Release Equity

By Release Equity

Equity release isn’t ideal for everyone and there are several factors and specifications you should consider before releasing equity. Despite this, it can still be a very good option for the majority of homeowners. There are many benefits and reasons that you should release equity from your home.

Essex Equity Release can provide advice to all homeowners regarding equity release. We make sure you always have the information you need to choose the right plan.

Cut Costs & Remove Debts

One of the most popular reasons for releasing equity is to prevent future costs and pay off any outstanding debts that you still have. In later life, you will often want to get most payments out of the way so you can enjoy your remaining life, without worrying about outgoing payments.

This allows you to keep any income you still have rather than immediately losing it due to repayments and debt. Helping you cut costs in the short and long-term, you should still have money leftover from equity release after that to ease any financial burdens.

Holidays, Travelling & Spending

In a recent survey by Over 50 Choices, holiday and travel were listed as the reason for releasing equity by 4% of people. Despite this being a small number, it is still a great option. If you have a strong financial position but do not have lots of disposable income, releasing equity can make your later years much more enjoyable.

Whether you are looking to purchase a vehicle, take a trip to the Caribbean or buy a holiday home, you are not limited by your spending when releasing equity. You can use the money to fund anything you require!

You should always be able to live your life the way you want. With the help of equity release plans, this is something you can easily achieve.

Gifting Family Members

Equity release doesn’t have to be used for your own benefits. If family members or close friends are struggling with financial issues, gifting family members could be one of the best options for you after releasing equity.

As you have complete freedom over what you do with your money, supporting family members can always be a good choice. Whether this is to help them with debts, mortgages or loans or it is a different financial issue, releasing equity can always ease your worries.

Receive A Plan Suitable For You

Another reason you should release equity is that, with many plans available, you can always find an option suited to your needs. Our team will advise you regarding all plans and make sure you receive the lump sum you require at a fair interest rate, so you never have to worry about repayments until you have passed away or moved into long term care.

Additionally, with most equity plans, you have the option to ring-fence a certain amount of money, allowing you to leave an inheritance. With so many plans available, you can always find a criteria that matches your specifications.

Staying In Your Home & Making Repayments

The biggest benefit of releasing equity is the fact you can stay in your home until both you and your partner have moved into long term care or passed away, without making repayments. This makes equity release unique among different types of loans, as you will never have to make monthly repayments.

With a no negative equity guarantee also included in all plans, this ensures when you have to sell the property, your repayment will never be larger than the amount the property was sold for.

Contact Us

If you would like to release equity or want more information regarding the plans that we have available, get in touch with Essex Equity Release today. We can make a quick booking to discuss your requirements and find the perfect plan for your needs. Call us today on 01268 799211 or fill in our contact form to make an enquiry.