FAQ’s

Frequently Asked Questions

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How much does it cost?

Lifetime Mortgages have fixed or variable interest rates, if a variable rate is selected this will have a “cap” (upper limit) set from inception. You choose how you wish the interest accrued to be serviced either monthly payments, partial payments or none at all (roll up). These interest costs will be added to the amount you have borrowed and will be repaid at the end of your plan, your property is sold, or you choose to repay the loan. There will be certain other costs involved in setting up your plan, these will include:

  • The Provider who is financing your plan – Normally described as an ‘application fee’ or ‘administration fee’.
  • Your Adviser, who will carry out detailed research into the options and recommend the most suitable plan from the range available, followed with a written report containing recommendations and a personalised Key Fact Illustration (KFI). They will process all the required paperwork with you and handle the process through to eventual completion and release of the funds. Normally called a ‘broker fee’.
  • Your Solicitor, for providing you with independent legal advice and carrying out any further necessary legal work – Described as legal fees
  • The Surveyor (valuer) who will inspect your property in order to give an accurate and independent value estimate at the time that you take out your plan. – Referred to a ‘valuation fee’.
  • Providers can offer products that offer a cashback, which will allow you to offset some of these fees, you can speak to our advisers if this is important to you. Some providers may not charge any of the fees listed above, detailed research of the market and available plans and products is essential.

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Will I lose my home?

As long as the product chosen is a lifetime mortgage, these come with protections in place from the Equity Release Council. One of these protections is the right to remain in your property for life or until you need to move into long term care.

Retirement mortgages however do not come with these protections. Therefore, it is imperative that clients speak to a trained advisor to avoid any potential issues.

How much can I borrow?

There are several factors that will govern the amount you can borrow. This will be the value of your property, your age and your health.

Please visit our calculator to get an indicative idea of the amount available to you, then feel free to contact us to discuss this further. If you are interested.

I cannot release enough equity

Those clients with ill health or lifestyle issues can achieve higher loan to values than standard plans which gives you the ability to borrow more. Take a look at our calculator to see what you could potentially borrow.

I want to leave an inheritance, Can I?

Interest can be serviced for the lifetime and for as much as you wish/can afford, there are also voluntary payment lifetime mortgages available giving you the ability to make repayments if and when you want. There is also a mechanism available called inheritance protection or protected equity, whereby you stipulate from the outset how much you wish to have as a guaranteed inheritance for your estate from the value of your home.

Can I move home after taking Equity Release?

Certain schemes allow you to move home, these portable products are very useful as you never know when your circumstances may change.

Won’t interest make it expensive?

You have the ability to service any part or all of the interest payments on your lifetime mortgage. Equally you could choose to not pay any interest at all and simply allow this to “roll-up” this would be added to the amount borrowed and repaid at the end of your plan (upon death or entering long term care), your property is sold or you choose to repay the loan.

Will I be charged a fortune if I want to repay?

Many providers are now using fixed early redemption charges similar to conventional mortgages rather than the normal Gilt rates. Even if you choose a gilt rate linked redemption charge, Gilt rates are at an all time low so can only really increase meaning any charges will be minimal or nothing at all.

In addition to the above, there is also a downsizing guarantee available which would give you the ability to repay the loan without penalty upon moving to a new house, after a qualifying period.

I need capital/income throughout retirement

Drawdown facilities are available where you are able to have a pre-agreed cash reserve available when you want it. This can provide regular fixed income over 10 – 25 years or more.

I am looking to purchase a new home in a Sheltered Housing complex, can you help?

We have providers who can provide finance on these types of properties where there is an age restriction on the title (normally over 55’s).

Can I use Equity Release using my second home or Buy to Let property instead of my own home?

Yes, we have lenders on panel who cater for these types of property. You can also use second homes and/or Buy to Let properties as additional collateral allowing you to increase the amount you can borrow.

Need Help?

Please feel free to contact us. We will be more than happy to answer any questions you may have. You can call the office or drop us an email.

01277 620083

info@equityreleasebrokers.com

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