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Buying the Retirement Home of Your Dreams: Equity Release in Newcastle

Retirement can present a lot of questions when it comes to finances. Downsizing is the natural choice for many of us as we think about where we might want to spend our retirement; however, while downsizing may result in a smaller, more manageable property, it doesn’t always result in a lower-priced property. In such cases, exploring options like buying a new home with equity release can offer a solution, allowing retirees to access the value tied up in their current property to fund the purchase of a more suitable home for their retirement years.

 

Later Life Mortgages to Move Home

We specialise in all types of mortgages, however, if you are 55 and over, a Lifetime Mortgage may help you buy a new home. As equity release providers in Newcastle, we can advise you on the process and answer any questions you may have. Using a lifetime mortgage can help you gain the extra buying power you may need to find the ideal retirement home.

 

Downsizing: Space Not Costs

Downsizing to a more suitable home may not, unfortunately, always translate to a downsized cost. Bungalows can frequently cost more than houses depending on the circumstances. There are, naturally, reasons beyond cost that you might want to downsize. Whether you want to downsize in physical space or just in cost, we can help you find the right property and advise you on the equity release process.

 

Expert Mortgage Advice

Even if you have had multiple mortgages in the past, navigating the difficulties and complexities of later-life mortgages, with all of the lenders and products available, can be tricky. At North East Equity Release, we have been providing expert mortgage advice for more than a decade. If you are looking at the move to your retirement home, get in touch with us today to discuss your options.

 

Contact Us

For advice on equity release to buy a new home, get in touch today for expert advice. We can offer guidance and support on equity release in Newcastle and securing a lifetime mortgage to assist you in buying a new home, so get in touch today–appointments can be held over the phone, via video, or in the comfort of your home.

We cover all areas of the North East, including, Morpeth, Cramlington, Gosforth, Newcastle, Gateshead, Washington, Whickham, Low Fell, Bedlington, Blyth, Ashington, Prudhoe, Corbridge, Hexham, Rothbury, Alnwick, Amble, Ponteland, Whitley Bay, Tynemouth, Durham.

Get a head-start by trying our free equity release calculator tool to see how much you could release from your home.

Joanne, equity release adviser, offering later life mortgage advice to a client

While entering the golden years of life, many individuals are often confronted with the realisation that their pension provisions are not enough to allow them to enjoy their retirement to the full. In recent cases, as a result of the current cost of living crisis, many are even struggling just to make ends meet.

As such, many homeowners are turning to later life retirement mortgages to release some of their wealth tied up in their homes as a solution to this problem.

What are later life mortgages?

Later life mortgages, also known as equity release or lifetime mortgages, are financial products designed to allow homeowners aged 55 and above to access the wealth that is tied up in their home which is referred to as their “equity”.

Unlike standard income-assessed mortgages, later life mortgages do not require regular monthly repayments. Instead, the borrowed amount, plus interest, can be repaid when the homeowner passes away or moves into long-term care. This makes the product highly desirable for those entering later life with reduced income although it will reduce the value of your estate for your beneficiaries.

The benefits of later life mortgages

For those entering their twilight years, financial stability and peace of mind become paramount concerns for many. Later life mortgages can help homeowners maintain their independence, realise long-considered dreams, and ensure a dignified and comfortable retirement by offering:

Access to funds: One of the most significant advantages of later-life mortgages is that they provide homeowners with an initial tax-free cash lump sum and can also offer a drawdown facility which means they also have access to further funds which can be drawdown at a later date if and when needed which can be used to cover various expenses, including home improvements, medical bills, debt consolidation, or simply enhancing their quality of life as they enter the retirement phase.

Flexible or no monthly repayments: As mentioned earlier, these mortgages have no contractual monthly repayments, however, the customer has the choice to pay some, all or none of the mortgage interest and in some cases repay capital without incurring charges in order to mitigate the effect of rolled up interest and preserve the equity in the home.

Home certainty: A lifetime mortgage is no different to a standard mortgage in that it is a loan secured against your home of which you retain 100% ownership and therefore can continue to live in your home for as long as you desire and without interference. 

Later life mortgages are designed to enable homeowners to age in the comfort of their own homes as well as having the freedom to move.

Elderly woman holding a small house in her hands

Meet Joanne: Your trusted later life mortgage expert

Navigating the world of later life mortgages can be overwhelming, with various options and considerations to explore. This is where Joanne, our retirement mortgage expert with over 30 years of experience in the business can help!

As a member of the Equity Release Council, Joanne provides clear and transparent advice taking as much time as is needed to ensure you have a full understanding of the benefits of a later life mortgage as well as any potential risks. She can offer alternative financial solutions, including checking whether you may be entitled to any unclaimed benefits whilst also ensuring that you won’t affect any current entitlement to any benefits you may already receive.

Joanne spends time to understand your personal financial situation and works closely with her clients from the very first call, throughout the whole application process and beyond. Trusted friends and family are also welcome to be included throughout the entire process.

Embrace the opportunities that later life mortgages provide and take a step closer to financial security by getting in touch today! 

older couple walking through a field with their arms around each other

Equity Release is a big financial decision and can have a financial impact on the consumer and their family so it’s important once you’ve acquired a Lifetime Mortgage that you continue to be supported by experienced Equity Release Advisers.

At North East Equity Release, we are committed to providing you with the best service and support before, during and after your application process.

After using our services to arrange your mortgage, we will always be on hand to answer any future questions you may have. We ensure our customers are given all the support and assistance they may need, whenever they need it.

We also ensure all our communications with you are delivered in a clear and concise manner and are never misleading. We spend as much time as needed to ensure you have a full understanding of the products and their potential impact on your estate.

Although it’s called a Lifetime Mortgage and interest rates are currently fixed for the lifetime of the mortgage, you don’t have to keep the same mortgage for life….

As interest rates are subject to fluctuation, lower fixed interest rates than you currently have may become available and because early repayment charges on most plans no longer run for the lifetime of the plan, in some cases it may be cost-effective to remortgage your lifetime mortgage to a new lender with a lower interest rate.

We can carry out a review of your mortgage at no cost at any time in the future to see if this is an option for you.

We will also always be on hand to help you access your drawdown facility if you have one and assist with any further borrowing if required.

If you’re considering a lifetime mortgage and would like advice from an experienced, qualified. industry professional, get in touch with our Equity Release Adviser Joanne today.

Older couple sitting at a table discussing equity options

Do you dream of spending your golden years travelling the world and engaging in all your favourite activities, but are unsure how you would be able to pay for it? If so, a Lifetime Mortgage could be your best chance of making your dreams a reality.

If you wish to improve your retirement options but are unsure if equity release is the best option, we may have the solution for you. We can assist you in determining whether later-life lending is the best course of action for your future with the help of our equity release quiz.

The quiz challenges three separate personal qualities of an individual by asking a series of questions.

Knowledge is the first personal characteristic the quiz considers. The quiz asks questions to determine how familiar you are with the concept of lifetime mortgages and helps fill in any knowledge gaps toy may have by educating you on areas you may have previously been unaware of.

It next looks at personal qualities, and asks you a series of personal questions to figure out what plans you have already made for your retirement lifestyle. Once we are aware of your specific circumstances, we can assist you in determining whether a lifetime mortgage is the most beneficial method of financing your retirement.

Qualification is the last consideration of the quiz. The simple questions will help us determine if you would be eligible for later-life lending based on your specific circumstances.

After the quiz is completed, a report with an overall score will be produced. You will be given a score for each of the three considerations, a summary of all three sections, a total score that is the average of the three, and recommendations for your next course of action.

This quiz can be beneficial if you are considering equity release as it gives you an instant personalised report that is entirely unique to you. It can help you better understand your strengths and weaknesses and give you a better understanding of how an equity release adviser can assist you before you get in touch.

It is important to remember that navigating your finances through later life and into retirement can be tricky, especially as there are now so many options available to those aged 55+. Expert advice is crucial to ensure the best outcome based on your specific and individual needs.

If you are considering a Lifetime Mortgage after completing the quiz, our highly experienced Equity Release Adviser is here to take you through the next steps.

With a better understanding of your situation, Joanne will be able to offer you specialised guidance and assist you in exploring all of the options that are available to you in a clear and concise manner.

Get in touch with Joanne today for quality, professional advice on equity release.

Face-to-face solicitor conversation with elderly couple

Equity release is a complex financial decision that requires a comprehensive understanding of an individual’s circumstances and future aspirations. Today we explore the value of engaging in personal, face-to-face meetings with industry professionals during the equity release process. 

Protecting potentially vulnerable individuals

Equity release is beneficial for many people, however as this product is only available to people aged 55 and over, a lot of potential candidates for equity release are elderly and they may lack family support. Some may be particularly vulnerable and/or have limited financial literacy.

Equity Release professionals, such as solicitors, play a crucial role in safeguarding the interests of these individuals. Meeting in person allows equity release solicitors to ensure that individuals are fully capable of making informed decisions and can identify signs of vulnerability or undue influence.

De-mystifying equity release products

As there are legal and financial aspects to be considered when choosing an equity release product, after the help of a qualified advisor to make an application for the right product, the guidance of a face-to-face solicitor is imperative to further ensure comprehension of the mortgage contract and the implications and potential risks associated before legally proceeding.

At North East Equity Release we use trusted, specialist equity release solicitors to ensure complex legal jargon is explained to our clients in a face-to-face meeting and in a way that they understand, helping them to navigate the fine print and minimising potential misunderstandings.

Using Equity Release Council members

As members of the Equity Release Council, we are committed to recommending qualified equity release solicitors who are also part of this industry-renowned trade body. We want to ensure that our clients are receiving the best, independent legal advice and are fully aware of the legal obligations and financial implications associated with an equity release plan.

Customer protection is a priority at North East Equity Release and we ensure every client receives impartial and independent legal advice and are aware of all of their options before proceeding. Get in touch with Joanne today to learn more.

Elderly couple sitting on bench in park, contemplating equity release and early repayment charges

Are you interested in an equity release Lifetime Mortgage but concerned about potential penalties? It is important to consider that if you want to pay back your Lifetime Mortgage early, you may be subject to Early Repayment Charges (ERC).

What are Early Repayment Charges (ERC)?

For most borrowers, Lifetime Mortgages are for life and are repaid on either the sale of the property, entering long-term care or death (of the surviving partner for joint applications). However, if your circumstances change, you may find yourself wanting to repay your mortgage before any of the above scenarios occur.

In this case, depending on the type of Lifetime Mortgage you opt for, ERCs will apply. ERCs are calculated based on the initial loan amount, the length of time the Lifetime Mortgage has been in place and any changes in long-term interest rates. Both fixed early repayment and variable rate structures are available on the market.

Thankfully, many Lifetime Mortgage products on the market offer fixed ERC periods that are as short as eight years, meaning that you may be able to access a 0% charge if you pay your Lifetime Mortgage off at the end of that period.

Elderly hand signing equity release document which stipulates early repayment charges

What if I want to move home? Do charges apply?

You can move home with a Lifetime Mortgage at any time, however, the terms and conditions in relation to moving home vary between lenders. As part of our service at North East Equity Release, we can look for a Lifetime Mortgage product that has downsizing protection. A downsizing clause means that you can move to a less valuable home and pay off some of your loan without being subject to ERCs. 

Am I able to repay part of my Lifetime Mortgage early without a charge?

Since March 2022, all Equity Release Council-approved providers must allow Lifetime Mortgage customers to make penalty-free partial repayments. This will reduce the amount you owe on both the loan and the interest. You can stop making payments at any time.  

Chat with Joanne, your local equity release adviser, today!

As the name suggests, Lifetime Mortgages are designed to last for the remainder of your lifetime and therefore paying off the debt early can incur charges. You should always discuss your circumstances with a professional before securing a loan against your home.

Joanne can talk you through all the options available to you and if a Lifetime Mortgage is suitable, she can help you find a product that has a short ERC period and clauses that suit you and your future plans. 

“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.

Did you know that a fifth of equity release plans that are taken out are to cover the day-to-day cost of living? Using property wealth can help to supplement your income during the current cost of living crisis. If you’re retired and concerned about maintaining your current lifestyle or wish to support your children and grandchildren through this difficult time, then a lifetime mortgage could help you. But are there any drawbacks to doing this?

Senior man contemplating equity release in his home
Lifetime Mortgages are for life

Releasing equity by means of a lifetime mortgage is not a financial decision that should be taken lightly. Whilst current cost of living pressures can be a significant source of worry, it is important to consider the long-term implications of a lifetime mortgage. Hence the name, lifetime mortgages are a long-term product where a loan is secured against your home until you die or move into long-term care.

Lifetime mortgages charge compound interest

Lifetime mortgages charge compound interest, meaning that if you choose not to make monthly repayments, the amount you owe will roll up. This reduces the amount of equity left in your home and can eventually add up to the total value of your home. This can have an impact on the amount of inheritance that you can leave behind for your loved ones.

Interest rates are rising

With the Bank of England raising the base rate, interest rates are continuing to rise. Lifetime Mortgage interest rates currently start over 6.50%, which is considerably higher than the rates this time last year. There are a number of factors that can contribute to lifetime mortgage interest rates, including the requested LTV, your credit history and your age.

equity release interest rates

Conclusion

It is important to consider all your options and speak to a qualified equity release adviser. From taking out a retirement interest-only mortgage to remortgaging and exploring local authority grants, there are many options to consider before taking the plunge with a lifetime mortgage.

We have your best interests at heart. Get in touch with our friendly adviser, Joanne and arrange a consultation to discuss your requirements.

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.

Standard mortgage repayments can become a source of stress for many older people during their retirement or those hoping to retire early.

An Equity Release Lifetime Mortgage could provide a viable and accessible solution.

So, let’s say that you have a standard interest-only mortgage. You know that your mortgage is coming to the end of its term shortly, however, you have no repayment plan in place that will enable you to pay it off. Your pension income doesn’t leave a lot of wiggle room to facilitate your repayments, and you certainly don’t wish to sell up and move at this later stage in life.

This is a common predicament that many older people find themselves in.

So, what’s the solution?

Luckily, there are a number of suitable equity release products available on the market that can enable you to pay off your mortgage if you are aged over 55.

With an Equity Release Lifetime Mortgage, the amount you can release varies from 21-56% of the value of your home depending on your age. Different lenders offer a variety of plans and our experienced advisers can help you to find the most suitable plan for you and your circumstances.

miniature toy couple stepping on coins towards standard mortgage home

How does it work?

Basically, it is just a more flexible type of mortgage with no end term as it does not need to be repaid until you (or the surviving partner for joint applications) move into long term care or pass away. It gives you the choice from roll-up plans that do not require any monthly repayments at all to interest-serviced plans and plans that allow you to repay the capital if required, there are a multitude of options out there.

Once your mortgage application has been processed and finalised, your standard mortgage will be repaid and from this time onwards, you will no longer be contractually required to make any further monthly payments to your mortgage lender.

If you are keen to explore equity release as a viable way for you to pay off your mortgage, contact us today. We are proud to offer a free, no-obligation consultation, free of unnecessary jargon.