Equity Release
Guiding you through the process
Equity Release – We can guide you
Here at 2nd City Finance we can guide you through the process of Equity Release. What it would mean for you, as well as answering any queries you may have along the way.
Equity is the value of your home, minus any outstanding mortgage and any other loans secured against it. The equity is often passed on as an inheritance, however, an increasing number of people are tapping into some of this wealth to help boost their retirement finances.
After years of working hard to make monthly repayments, your home is likely to be your biggest asset, particularly if you have benefitted from an increase in house prices over the last few decades.
An alternative way to release the equity in your home would be to sell and downsize, however, leaving the family home and neighbourhood can be an emotional upheaval.
With people living longer and pensions not being what they once were, for many, savings have to stretch a lot further to last throughout retirement. That’s where equity release could help.
Get in touch for your initial consultation today.
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Lifetime Mortgage – Lump Sum
A lifetime mortgage is a form of equity release plan where a loan is secured against your property to provide you with a tax-free cash lump sum, with typically no monthly repayments to meet.
Compound interest is added to the lifetime mortgage until the plan comes to an end. The loan plus interest is eventually paid back when the home is sold, usually when you move into long-term care, or when you and your partner die.
You can typically release between 5-56.5% of the value of your property with a lifetime mortgage, depending on your age, health and lifestyle.
Lifetime Mortgage – Drawdown
Drawdown lifetime mortgages work in the same way as lump sum lifetime mortgages but with added flexibility.
Once you know the maximum amount of money you can release, after an initial release amount you can then choose to ‘drawdown’ the cash in stages as and when you want to. The interest is only added on the amount released so it adds up more slowly than it would if you released the full amount at the outset. Drawdown plans are a flexible option and can form an essential part of planning your future finances.
Protection – Downsizing
If for any reason you need to move to a smaller home, typically after five years of taking out a lifetime mortgage, you can pay the loan back early without incurring an early repayment charge, subject to lender criteria.
If acceptable, you can take the loan to the new property. This added flexibility gives you the peace of mind that, should your circumstances change for health or family reasons, you’ll be able to adjust your housing plans accordingly.
Protection – Inheritance
If you want to be able to guarantee an inheritance for your loved ones, you can ring-fence a portion of your property value with a protected lifetime mortgage. This allows you to guarantee that a percentage of the future value of your home will be left to your family when the property is sold, regardless of how much interest accrues.
EXAMPLE
A couple who are able to release £50,000 and want to ensure their grandchildren are left with an inheritance could take £30,000 (60% of the maximum available) leaving 40% of the property ‘protected’.
Frequently Asked Questions
Will I still own my home?
Yes. With a lifetime mortgage you are in control and can live there as long as you want to. However, with a reversion plan the reversion company will own all or part of the property, although you can live in it for the rest of your life.
Can I do equity release if I still have a mortgage?
Yes, however, you will need to repay the mortgage using the money released. Any funds left over are for you to enjoy.
Will I ever fall into negative equity?
With plans approved by the Equity Release Council, you will never owe more than the value of your home.
What happens when I die or need long term care?
Your home will be sold once you and your partner have died. The sale proceeds will be used to repay the amount you owe, and any money left will go to your estate.
If one of you needs care in your home, this is not likely to affect the terms of your plan. Similarly, if one of you leaves to go into a care home, the other can continue to live in the property and your plan is not normally affected. However, the plan will usually end if both of you have to leave to go into long-term care.
You will not have to pay early repayment charges, as the plan will just end when the property is sold.
We are not authorised to provide advice for equity release products. This will be passed to a suitably qualified and authorised specialist. To understand the features and risks ask for a personalised illustration. An equity release product will reduce the value of your estate, will not be suitable for everyone and may affect your entitlement to state benefit. Depending on the adviser you are referred to, there may be a fee for equity release advice the value of which will be confirmed at any initial meeting
Our fees and charges vary depending on the Services we provide to you. Our typical fee is £299. We will also be paid commission from the lender.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
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07498 938988
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michael@2ndcityfinance.co.uk
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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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2nd City Finance Ltd is an appointed representative of PRIMIS Mortgage Network, a trading name of Advance Mortgage Funding Limited. Advance Mortgage Funding Limited is authorised and regulated by the Financial Conduct Authority.
The guidance and/or information contained within the website is subject to UK regulatory regime and is therefore targeted at consumers based in the UK. Registered office address - Sigma House, Hadley Park East, Telford, Shropshire, United Kingdom, TF1 6QJ Registration number - 13055699 Trading address - 27 Piccadilly, Stoke-on-Trent, Staffordshire, ST1 1EN
Our fees and charges vary depending on the Services we provide to you. Our typical fee for mortgage advice is £495 which is payable on application. For more complex cases such as debt consolidation and adverse credit mortgages the maximum you can expect to pay would be £1,250. We also receive a commission from the lender which whom your mortgage has been placed.
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