Telephone:
0191 695 9493

Email:
info@northeastequityrelease.co.uk

smiling older woman holds key for new home

This is a very common question asked by homeowners who are considering a Lifetime Mortgage product, and it is an important one to ask.

Do I still own my home with Equity Release?

Yes. You are still the owner of your home, even if you have a Lifetime Mortgage secured against it.

The equity release lender does not own your property, they simply register their financial interest in your property by way of a charge which is registered with the Land Registry Office in the same way as a standard mortgage lender does.

This charge grants the lender the right to recover their money if you sell the property or the mortgage is not repaid within 12 months after the surviving applicant moves into long term care or passes.

Can I move house with Equity Release?

Yes. We only recommend mortgages from lenders who are members of the Equity Release Council and therefore their mortgage products must adhere to a set of minimum standards, one of which is:

The client must always have the right to move to another property subject to the new property being acceptable to the product provider as continuing security for the equity release loan.

By seeking guidance from a professional adviser who specialises in Equity Release, you can ensure you are getting the right product for your needs, from a reputable lender who holds membership with the ERC, covering you for all eventualities.

North East Equity Release can help you to find the right Equity Release product for your needs. Get in touch today.

“Are lifetime mortgages safe?” This is a common question among customers seeking advice on how to manage their later-life finances. Over the years, equity release misinformation and scare stories have circulated, resulting in 15% of UK homeowners claiming that they don’t understand equity release. While it is true that some borrowers in the 1980s were mis-sold home income plans and ended up owing more than their homes were worth, the equity release market has undergone significant changes and improvements over recent decades which has made it safer than ever.

As long as the equity release product and lender are regulated by the Financial Conduct Authority (FCA) and Equity Release Council (ERC), you can be confident that it is safe.

The most popular equity release product in 2022 is a lifetime mortgage, with most lifetime mortgage products offering features that safeguard you as a customer and provide greater flexibility.

These features include:

No Negative Equity Guarantee

As part of the Equity Release Council’s Product Standards, lifetime mortgage products come with a No Negative Equity Guarantee, which ensures that you and your beneficiaries will never owe more than your property is worth when sold.

Inheritance Protection Guarantee

Many lifetime mortgages on the market now offer an inheritance protection guarantee, which enables you to protect a portion of your property’s value that you can leave behind as an inheritance for your beneficiaries.

Senior woman sitting with granddaughter at table colouring in drawings

Partial Capital Repayments

Most lifetime mortgage plans have an optional partial repayment feature, which allows you to repay up to 10% of the total amount borrowed in any 12-month period without paying an Early Repayment Charge.

We understand that you likely have a lot of questions regarding lifetime mortgages and their features. We answer some of your frequently asked questions here.

You can find out if equity release is right for you and your personal circumstances without it costing you a penny by contacting our equity release advisers on 07809 715 243 for an informal chat.

A lifetime mortgage is a big financial decision for people over the age of 55, and there are a plethora of misconceptions surrounding equity release. As more products and features are entering the growing equity release market, it can feel overwhelming and confusing. In this blog post, we’re answering some lifetime mortgage FAQs surrounding this flexible and cost-effective financial product.

Will I lose my home?

No… You will retain 100% ownership until you pass away or move into long-term care when your estate will normally sell your home to repay the mortgage, however, if the family wishes to keep the property, they can repay the mortgage in full at this time using funds from elsewhere or potentially raising a mortgage on the property themselves to repay the lifetime mortgage.

All equity release products regulated by the Equity Release Council include a ‘No Negative Equity Guarantee’ which means you will never have to pay back more than the house sells for at the normal market price. Any amount owing over this figure is written off by the lender.

How much money could I release from my home?

Typically, you can release between 20% and 60% of your property’s value, however, there are several variables that come into play including the condition of your property, your age and health and whether it is a joint application.

miniature old man and house representing equity release

 

What’s the difference between equity release and a lifetime mortgage?

A lifetime mortgage is actually a type of equity release product. It is the most popular type of plan, making up 99% of products on the equity release market. A lifetime mortgage is simply a loan secured against your home that will run for the rest of your life. You will not have to make monthly repayments.

Could I repay the loan in full if I wanted to?

Yes, you can repay the loan in full at any time, however early repayment charges may apply.

What about inheritance?

Any type of equity release product can reduce the value of your property. The money borrowed and the interest accumulated will have to be paid off when you pass away. If you are concerned about what you leave behind for your loved ones, it is worth looking for a lifetime mortgage product that has an ‘inheritance protection guarantee’, which is a facility that allows a certain percentage of the value of your home to be protected for your beneficiaries.

What is a ‘drawdown’ facility?

A drawdown facility means that you receive an initial lump sum and then you are able to access pre-agreed funds as and when you like. To learn more about this product feature, read our blog post.

Do you have more questions about equity release? We’re here to answer them. Contact us here.