Getting to grips with equity release mortgages

Wednesday, 11th March, 2020
equity release mortgages

I know, I know. We’re banging the equity release mortgage drum quite hard at the moment, particularly given how we only recently published an article covering what you need to know about equity release mortgages. However, there are two reasons for this.

Firstly, we wanted to draw your attention to the fact that we recently featured in the Daily Express after the newspaper’s financial journalist, Harvey Jones, asked Complete Mortgages for its view on the equity release mortgage sector (you can read it here).

Secondly, the piece of equity release mortgage advice included in this article could save you a lot of blood, sweat and tears in the long term.

The rise of equity release

Equity release mortgages in Guildford and the surrounding areas are on the up. And, as a Surrey equity release specialist, we can tell you that it’s because equity release represents a straightforward way in which to release capital from your property.

According to UK Finance, a collective voice for the banking and finance industry, there are around 20,000 borrowers aged 65+ with interest-only mortgages set to mature in 2020 – and who will still owe over £100,000.

Whilst £100,000 is still a sizeable balance, UK Finance suggests that the average amount of equity in property owned by those aged 65+ is £387,000. So, how do you pay off the balance if you’re retired, earning less than you used to or simply don’t have the money? The answer: equity release.

Retirement interest-only (RIO) mortgages have been popular for some time, however, the rise in strict affordability checks has seen many people go through the RIO mortgage application process only to fail to qualify on affordability checks. Importantly, equity release mortgages do not require affordability checks and applicants often find that they can release equity from their property very quickly. Having handled large volumes of mortgages in this space, we can see that the success rate of equity release mortgages vs. retirement interest-only mortgages is much higher.

Not only that, but we’ve recently halved our clients’ mortgage rates and saved them considerable amounts of money by moving them from their standard variable mortgage rate to an equity release mortgage.

If you’re considering equity release as a way in which to free up capital and you are over the age of 55, then Complete Mortgages is a team of Guildford mortgage advisers that can advise and guide you through the process. We have access to a wide range of equity release mortgage products and will handle the entire application process on your behalf.

Contact the equity release mortgage team on 01483 238280 or email info@complete-mortgages.co.uk. Remember, we also specialise in first time buyer mortgages, adverse mortgages and buy to let mortgages, too.


Equity release mortgages revisited

Monday, 17th February, 2020
equity release

The equity release mortgage is becoming increasingly popular. It’s also playing a significant role in helping older people pay off debts and mortgages, with figures suggesting that equity release is seeing £10m ‘withdrawn’ from homes each day.

Those reading this who are new to the world of equity release may be asking themselves ‘what is equity release?’ and ‘how does equity release work?’ Well, if that is you, then read on as this quick guide to equity release mortgages will fill in any gaps you might have.

1. What is equity release?

Equity release is a way in which older people, typically those aged from 55-60 and upwards, can unlock the value of their home – or ‘cash in’ – without needing to actually move home.

2. How does equity release work?

There are two main routes into equity release: lifetime mortgages and home reversion plans.

The lifetime mortgage is typically the most popular route, and involves borrowing a portion of your property’s value at a fixed or capped interest rate. You don’t make repayments. Instead, you make a lump sum payment – which includes compounded interest – when the house is sold. There is an opportunity to get a lifetime mortgage with a drawdown option built in, whereby you can pay back the interest and sometimes even the capital, too.

Home reversion plans are generally geared towards those aged 65+ and will see a lender pay you a tax-free lump sum whilst allowing you to remain in the property – rent-free – until you die. When this happens, proceeds from the sale are split based on the percentage split agreed when the home reversion plan was taken out. If the property rises in value, so too does the amount the lender gets when the property is sold. Please note that Complete Mortgages does not give advice on home reversion plans.

3. How much can I borrow?

This will depend on your age and the value of your property. Your health is also likely to be taken into consideration. A good mortgage broker will be able to help you establish this once they have a clearer picture of you and fully understand your circumstances. As a Guildford mortgage broker that manages a high volume of equity release mortgages on a daily basis, we’ll be able to assist you at every step of the equity release mortgage application process.

4. What next?

Equity release mortgages are very individual-specific, so our advice to anyone thinking of going down this route would be to arrange a meeting with a specialist mortgage broker, who will be able to source a selection of competitive equity release mortgages for you.

Just make sure that you’re fully aware of any mortgage broker charges along the way. Complete Mortgages, for example, only charges a one-off flat fee of £699 and for that we’ll handle the entire mortgage application from the beginning until you receive the money.

Whether you’re looking for an equity release mortgage or any other form of complex mortgage, Complete Mortgages will be able to help. Contact the team on 01483 238280 or email info@complete-mortgages.co.uk.


Reasons to use a mortgage broker

Friday, 17th January, 2020
REASONS TO USE A MORTGAGE BROKER

Is technology about to make the mortgage broker redundant? Will robots and AI replace the traditional role of your local mortgage adviser?

The answer is ‘yes’, according to news reports from the start of the year, which claim how mortgage applications may be as simple as car insurance in the next 10 years due to advancements in finance-led technological processes.

Does Complete Mortgages agree? No, and here’s why.

1. Power to the people

There are some professions that simply need people; those in the fire service, police and surgeons all spring to mind.  But even it when it comes to the services industry, people generally tend to want to deal with people. Not screens. Or robots. The nuances that dealing with a real person allows (body language, asking questions that would be hard to articulate or communicate when not face to face) play a huge role. And when it comes to getting a mortgage, there is never any shortage of questions. So, from my perspective, applying for a mortgage isn’t an area that’s going to be entirely automated any time soon.

2. Experience is everything

As a Guildford mortgage broker, we’ve arranged mortgages for the widest spectrum of customers, from first time buyers through to equity release mortgage applicants, for many years. As a result, we’ve encountered scenarios and overcome obstructions and situations which, when added together, have a built up a high level of experience, knowledge and understanding of the mortgage sector that technology would find hard to match. Unlike the binary, black or white nature of machines, real mortgage brokers can deal with the shades of grey in-between.

3. Mortgage brokers not machines have relationships with lenders

Similar to point 1, people-based relationships enable a good mortgage broker to pick up the phone and chase the lender (who they may have known for years through working together) about Mr Smith’s mortgage application. This level of personal service, which doesn’t rely on flow diagrams and computer code, is what ultimately speeds up the mortgage application process and gets mortgages approved.

4. The perfect match

Mortgage brokers match specific lenders and specific mortgage deals with specific people. This follows a consultative approach that enables a mortgage broker to fully understand the intricacies of individual applicants’ lives, their financial limitations and personal circumstances. Without fully understanding and appraising someone prior to their mortgage application (a process that can take time), the person trying to get a mortgage may never be presented with the most suitable option.

If you’re looking to arrange a mortgage (with a real person), then contact our team of Guildford mortgage advisers on 01483 238280 or email info@complete-mortgages.co.uk.


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


Are equity release mortgages good or bad?

Tuesday, 11th December, 2018
equity release

The simple answer to what is a rather broad question is that it all depends on where you are in life in terms of finance, goals and objectives.

What can’t be avoided, however, is that the equity release mortgage is growing in popularity.

According to the latest Equity Release Council figures, homeowners released over £1bn of equity from their homes in the third quarter of 2018 – and £11m of property wealth is being ‘cashed in’ on a daily basis. As a Guildford mortgage broker we’ve certainly seen equity release mortgage applications rise.

Whilst the figures are compelling, we are regularly asked, ‘Is releasing equity in my property a good thing?’ So, to help you make your own mind up, we’ve provided a list of equity release pros and cons.

However, before we look at the fors and against equity release, let’s start by briefly explaining how equity release works (note: for a more in-depth equity release mortgage Q&A click here).

What is equity release?

If you’re a homeowner aged over 55, equity release enables you to release money from your property – without having to move. You can take a lump sum, as a drawdown (taking smaller amounts at different times) or as a home reversion plan (selling part of your property to the lender in exchange for money).

The pros 

1. Staying put

If you don’t want to leave your property, but need more money in order to continue living there, then equity release mortgages enable you to stay where you are whilst providing you with the funds required to do so.

2. No negative equity – guaranteed

Lenders who are members of the Equity Release Council – and Complete Mortgages tends to only work with those that are – have to include a no negative equity guarantee, which means that if there ever was a crash and the value of the property became less that the value owed, the lender would cover it, not you.

3. Beat inheritance tax

Nobody really likes the idea of being taxed on inheritance, so releasing equity against the value of your property can represent a way in which to pass on your wealth in a tax efficient way.

The cons

1. Compound interest

Equity release mortgages do not work in the same way as residential mortgages. Whereas homeowners with residential mortgages typically pay off the interest charges on a monthly basis, equity release mortgage interest is typically added to the overall debt. This means that the outstanding equity release mortgage balance can rise quickly.

2. Hard to go back

If you thought early repayment charges on fixed mortgages were high, then you might be surprised to learn that early repayment charges on equity release mortgages can be as high as a quarter of the amount borrowed. As a result, you need to be absolutely sure that equity release is for you before going down that route – and also that your mortgage broker goes through everything with you in detail.

3. Benefit or no benefit?

Those who receive means-tested benefits may find that a sudden cash injection results in these being taken away. Make sure you understand the wider financial implications before committing to a long-term decision.

Still not sure? Why not contact the Complete Mortgages team 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 the self-employed, mortgages for teachers, adverse credit mortgages, buy to let mortgages and limited company buy to let mortgages.

By Mark Finnegan, Director at Complete Mortgages


A stress-free mortgage zone

Tuesday, 27th November, 2018
mortgage advice

It’s always bittersweet on reading research that indicates that the mortgage sector – and those working within it – could be doing better.

It’s bitter in the sense that as a mortgage professional, I would like to see the sector working as efficiently and as proactively as possible. When it appears that in some quarters this isn’t the case, then I can’t help but feel disappointed.

However, it’s also sweet as whilst it may reveal failings by others, it also reinforces my view that Complete Mortgages, as a Guildford Mortgage Broker, is amongst the mortgage brokers who are operating at the highest level when it comes to standard setting.

Research recently published by a UK mortgage broker* revealed that stressful mortgage applications are not only causing homeowners anxiety, but also putting them off remortgaging – something that can save homeowners money in the long-term.

It also revealed that approximately 2.5 million people suffered stress during their mortgage application, that 14% of homeowners said they rarely understood where they were in the mortgage application process and that 13% claimed that the way deals were advertised was confusing.

Whilst the research has been commissioned by a mortgage broker to reveal findings that no doubt support their own objectives, we can’t overlook the fact that it’s revealed that there are a phenomenal number of people suffering from mortgage stress when they simply don’t need to.

For those who read Complete Mortgages’ news pages, then you’ll know that we’re not ones to blow our own trumpet, opting instead for guides, mortgage tips and general content that we feel adds value to those who read it. However, in light of this research, we feel that it’s important that brokers who pride themselves on excellent communication and delivering an impeccable service should also be heard.

So, by way of a response to the findings, here’s Complete Mortgages’ own mortgage promise.

Whether you’re looking to apply for a residential mortgage, a buy to let mortgage, equity release mortgage, or even if you want to apply for bridging loans and commercial mortgages, Complete Mortgages will:

  1. Handle 100% of the mortgage paperwork on your behalf
  2. Proactively chase ALL mortgage applications and update you at every step of the way
  3. Talk you through the process at every stage of the mortgage application

Our customer satisfaction survey, based on the feedback of over 250 clients during the past 12 months, has given us an average customer satisfaction score of 98.82%.

Not only are we really proud of it, but it also demonstrates that there are excellent mortgage brokers out there – and that you really shouldn’t need to settle for second best, nor put up with mortgage stress at any point.

For stress-free mortgage advice contact the experienced Complete Mortgages team on 01483 238280 or email info@complete-mortgages.co.uk. Remember, we also specialise in specialist mortgages in Guildford and the surrounding areas such as self-employed mortgages, adverse credit mortgages and limited company buy to let mortgages, too.

*Trussle

By Mark Finnegan, Director at Complete Mortgages