Putting the ‘ease’ in Equity Release mortgages

Thursday, 31st October, 2019

There are numerous reasons why aging homeowners would want to release property wealth.

Whether it’s to boost the pension pot, help your children (or grandchildren) afford their first home or simply free up some money to buy that dream car you’ve always wanted, equity release mortgages have come to represent a viable route in which homeowners can convert bricks and mortar into ready cash.

Furthermore, thanks to the proliferation of equity release mortgage deals over the last few years, it’s also an easy and cost efficient route, too.

According to the Equity Release Council – a trade body that represents the equity release mortgage sector and promotes high standards of conduct and practice in the provision of and advice on equity release – a staggering £1.85billion in housing wealth was released in the first half of 2019.

And this growing popularity is also helping to drive down equity release mortgage rates, too, with some lifetime mortgage rates coming in at under 3 per cent. In summary, going down the equity release route is now a very easy process to carry out.

If you’re about to apply for an equity release mortgage and would like to know more about how they work, then read our guide to equity release mortgages. Similarly, read the top tips on equity release mortgages to get Complete Mortgages’ take on what you should be considering before you start the process.

However, as easy as it is to get an equity release mortgage, there are a few things to consider:

1. Borrow in stages

Regardless of the amount you agree to free up via equity release, don’t take it all in one go (if you can help it). After all, as soon as you borrow, interest – and the effects of compound interest – quickly begins to have an effect. If you think £20,000 can cover you for 10 years, just take that and wait before taking the next sum. There’s little point paying interest on money you don’t need.

2. Quality counts

As mentioned previously, the Equity Release Council exists to promote high standards and uphold quality. So, make sure that when it comes to applying for equity release, you use a company that is a member of the Equity Release Council.

3.  For your benefit…

Check your benefits status. If you’re entitled to – or currently receiving – benefits, a significant injection of cash (which is treated very differently to equity locked in a property) may change your benefits status. In fact, it could result in the reduction, or even the complete stoppage, of your benefits.

4Get good mortgage advice

A good mortgage broker in Guildford, such as Complete Mortgages, will be able to help you make the right choice when it comes to equity release. There is a lot to consider when it comes to this type of mortgage, so speaking with an expert is an absolute essential from our perspective.

As an equity release mortgage specialist, let Complete Mortgages help you decide if equity release is the best way forward for you. Contact the team on 01483 238280 or email info@complete-motgages.co.uk.


Six top tips on equity release mortgages

Wednesday, 20th March, 2019
Equity Release Mortgages

If you’re considering going down the equity release mortgage route, then you’re probably aware of the overall concept behind them, how they work and the benefits of releasing equity from your home – particularly if you’re 55 years old and above and looking to free up capital.

If that’s not the case, then read our ‘Are equity release mortgages good or bad?’ article, which provides a quick and easy guide to equity release.

However, if you are further down the line and are now thinking about the wider implications, then these six tips may be of interest.

1. Consider the alternatives

Equity release mortgages are effective and their growing popularity reflects this, however it’s always good to know your options. When it comes to alternatives, then the most cost effective way of raising capital is to downsize. However, if space is important to you and you want to stay in your home and have more money at your disposal, then applying for an equity release mortgage could be a more suitable route.

2. Keep your family in the loop

Equity release is a big decision and one with a number of potential repercussions for children and family members later on down the line. Our advice, when it comes to equity release mortgages, is to make your intentions clear to all those who may be affected by an equity release contract in the future.

3. Big decisions require good mortgage brokers

As a Guildford mortgage broker, we’ve seen – and helped people through – the effects of poor equity release decisions made on the back of bad advice. Getting an equity release mortgage is a significant decision and one that needs to be backed up by sound advice. Make sure that choosing a good mortgage broker is on your list of priorities before committing yourself to anything.

4. Know the numbers

Fees and compound interest form part of equity release mortgage deals. It’s no different from any other mortgage agreement in that regard, however this may have more implications on those who, as they get older, are likely to work and earn less. Know where you stand and how much it’s going to cost you before you sign the paperwork.

5. Equity release is convenient…

…but it can also be an expensive way to borrow. If, after getting good advice from a mortgage broker, you decide to apply for an equity release mortgage, then make sure you don’t take out more than you need, as any excess money will be accruing interest up until the point that your property is sold.

6. Lowest isn’t always the best

Choosing a mortgage with the lowest possible rate is pretty much a priority for everyone. However, when it comes to equity release, lowest isn’t necessarily the best. Equity release mortgage deals often include special features, such as offering the borrower the ability to make monthly repayments to avoid interest rolling up. Whilst the premium for this may be a slightly higher interest rate, it may work out more beneficial on a long-term basis and provide a greater degree of flexibility.

Still unsure about equity release mortgages? Contact one of our equity release mortgage specialists on 01483 238280 or email info@complete-mortgages.co.uk to find out more. Remember, we’re not just specialists in equity release mortgages but also first time buyer mortgages, buy to let mortgages and commercial mortgages, too.

By Mark Lucas, Equity Release Specialist at Complete Mortgages


How to get the best equity release mortgage advice

Thursday, 24th May, 2018

Equity release mortgages have well and truly arrived.

As recently pointed out in our last equity release article, which includes a five point guide as to what you need to know about equity release loans, it is estimated that the value of UK equity release mortgages increased by £10bn last year.

However, it’s important to note that wherever there’s an opportunity, there are always opportunists, which was my first thought on recently watching a series of equity release adverts on TV.

One advert was proudly selling access to equity release mortgages for a fee of ‘only’ 1.95%. Whilst this doesn’t sound that high, it typically equates to around £1,395 – £1,495, which is, in fact, a relatively high charge.

As a Guildford mortgage brokerage that specialises in helping our clients to get an equity release mortgage, we believe that our fees are much fairer and transparent. For example, our flat fee structure means that we can help you apply for an equity release mortgage for only £699 – regardless of the complexity of the mortgage and value of the loan amount.

What’s more, our team of Guildford mortgage brokers now includes three equity release specialists. All three advisers have secured the highly coveted Certificate in Regulated Equity Release (CeRER) qualification, which ensures that Complete Mortgages can offer a wider selection of equity release mortgages to a wider section of the population.

It also means that we can help those who have traditionally taken out interest-only mortgages – and who are on an interest-only mortgage right now – to transition to an equity release deal without having to refer to a third party.

Whether you’re currently on an interest-only mortgage and thinking of switching over to equity release, or you’re simply considering your options and think that equity release could be a route you’d like to take, the first thing you need to do is contact a trusted – and qualified – mortgage brokerage.

Why not contact us to find out more on 01483 238280 or by emailing info@complete-mortgages.co.uk.

Complete Mortgages also specialises in other mortgages over and above equity release mortgages. We can also arrange mortgages for self-employed people, mortgages for teachers, adverse credit mortgages, buy to let mortgages and limited company buy to let mortgages.

By Mark Lucas, Equity Release Adviser at Complete Mortgages


What is an equity release mortgage?

Tuesday, 6th March, 2018
lifetime_mortgage

It’s a big year for equity release mortgages.

In fact, estimates by one UK equity release specialist suggest that the value of UK equity release mortgages increased by a staggering £10bn last year.

So, what’s happening?

Essentially, the cost of living has grown whilst wage growth has slowed down. However, as we all know, the one thing that has also grown over recent decades is property prices, the result of which means that those who have owned a home for many years have amassed significant equity.

However, what good is equity when a) it’s locked within bricks and mortar and b) you could do with the money right now?

It seems as though the UK’s public is asking similar questions.

The Equity Release Council has revealed that the total amount of housing wealth unlocked by the over 55s reached £3.06bn in 2017; the first time equity release lending has exceeded £3bn in a single year.

And the appetite for equity release borrowing shows no signs of slowing down as Legal and General research highlights how one in five homeowners would consider using equity release as a way in which to unlock funds.

As a mortgage adviser in Guildford we are seeing more and more people apply for an equity release mortgage. There was a time when only a handful of people would consider this approach. However, as people increasingly live longer and money needs to stretch further, homeowners are now viewing equity release mortgages as a viable way in which to continue enjoying a high quality of life without making compromises.

Although before you consider it an option you’ll need to know how it works, so here are five things to know about equity release mortgages.

1. What is equity release?

A way of freeing up money tied up in your property as equity. You can spend it however you wish and there are no mortgage payments to make; the lender is repaid through the sale of your property.

2. Who can access equity release deals?

Those over 55 – all the way up to 95 – and who typically own a property worth £70,000 and above.

3. Can I still benefit from equity release if I currently have a mortgage?

Yes, as long as the funds you release can clear any outstanding borrowing.

4. Is equity release safe?

The Financial Conduct Authority regulates equity release, however, you should make sure that the lender is a member of the Equity Release Council, which can help ensure that you don’t find yourself owing more than the value of the property at the end of the term.

5. Will I need to move?

Not at all. You can downsize in order to release equity but if you would rather not move, then this could be a win-win situation. Some lifetime mortgages now allow you to manage interest charges by making monthly repayments.  Or, instead of making monthly mortgage repayments, the interest can be rolled up and, when the plan finishes, the interest plus the original loan is paid pack to the lender via the sale of the property.  If you are moving home, many of the plans are portable.  The only thing to consider here is that it will decrease the value of your estate.

Still need more information? We understand that equity release is a big decision. So, for expert advice and guidance from a team of award winning mortgage advisers and equity release experts contact 01483 238280 or email info@complete-mortgages.co.uk.

By Mark Finnegan, Director at Complete Mortgages