Equity Release Advisor Shooters Hill
How does an Equity Release Mortgage work?
Our expert guide to releasing tax-free cash from your home
Lifetime/Equity Release
What is the maximum Equity Release mortgage available to me?
Simply input the value of your home and use the moveable toggle to select your age
The Retirement Years Should Be Filled With Freedom to Enjoy Great Times With Your Loved Ones
Retirement comes at a cost; releasing equity in a home can be a great way to release money from your house to enjoy these years. This money can be spent on holidays, home improvements, helping your children or grandchildren. The fact is, you can spend as you so wish!
However, equity release mortgages need specialist advice and guidance; these mortgages are not suitable for everyone, and therefore, independent advisers’ help will guide you to the best solutions the marketplace has to offer, including other Later Life solutions such as Retirement Interest-Only mortgages.
It starts with a ‘no-commitment’ conversation with one of our equity release advisers in Greenwich to help you fully understand if there are alternatives. Following a conversation, you will have the knowledge of how an equity release mortgage works and if it is suitable for you.
*For our Fee Free guarantee, the minimum initial advance must be £60,000 otherwise, a fee of £699 is payable
Equity Release Newsletter
Our latest Equity Release newsletter will help you understand these products in greater detail and include several case studies which you are likely to relate to.
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Equity Release Experts in Shooters Hill
What is Equity Release?
The equity in your property is the value of your home minus any outstanding mortgage or other loans secured against it.
Historically, the equity of one’s home is passed on as an inheritance upon death, but nowadays, many retirees wish to do something with their equity at a time which suits them rather than wait for the inevitable!
We specialise in Lifetime Mortgages which is the most popular equity release product. There are a few options with this type of mortgage which we will cover in this brochure.
Am I Eligible for Equity Release?
You are aged 55-95
You Own Your Property
The Property is Mortgageable
You Choose How You Wish To Spend The Money
Our Mortgage Brokers in Shooters Hill say, the most popular reasons for equity release mortgages are
Home Improvements
Grandchildren’s School Fees
Helping Your Children Move Home
Holidays
Replace Car
Paying off the Existing Mortgage
Clearing Debt
Overseas Property
Lifetime Mortgage Options
Equity release mortgages have evolved in recent times. The great news is that these, once expensive products, have become much more competitively priced as new entrants join the market. This has made them a popular choice in recent years. There are two types of lifetime mortgage.
Lump Sum Lifetime Mortgage
This type of Lifetime mortgage will release an initial tax-free lump sum for you to use however you wish. The agreed Interest is compounded and added onto the mortgage capital otherwise known as ‘rolled-up interest’. The mortgage generally comes to an end upon death of the second mortgage applicant (if it is a joint mortgage) or the second mortgage applicant enters long-term care.
Drawdown Lifetime Mortgage
This works similarly to the lump sum option whereby you receive the initial lump sum, but also you agree to a drawdown facility with the mortgage lender. You can then ‘drawdown’ the remaining cash in stages as and when suitable for your needs. The main benefit this option gives is that you only pay interest once you have drawn the cash meaning that the interest adds up more slowly ensuring there will be more equity left in your property for family.
Features of Both Plans
Downsizing Protection
Circumstances change, whether it be due to health or family reasons. Having this feature gives you the flexibility to move to a smaller home. Typically, you would repay the loan without penalty subject to the lender’s criteria, then take a new mortgage on the new property. This should give you full peace of mind!
Inheritance Protection
For many, leaving a cash legacy to their loved ones is paramount. This feature allows you to ring-fence a percentage of your property to ensure that, when your property is sold, a percentage of the property will go to your family and will not be affected by the interest which accrues.
Partial Capital Repayments
When you have a rolled-up interest Lifetime mortgage the compounded interest accrues meaning the loan size increases. For example, if your interest rate were at 3% then the loan would double in just over 23 years. While this is an excellent option for someone who was asset-rich and cash-poor their preference, given a choice, could be to leave more equity for their family. A partial capital repayment option could be suitable if there were say an inheritance or a future investment matures. This option would typically allow a capital repayment up to a maximum of 15%.
Interest-only Payment
This feature will allow you to make monthly interest payments to ensure the interest does not compound at the rate it otherwise would do on a rolled-up basis. Providers enable you to repay the full interest payment each month or a partial amount with the option to convert into a fully rolled-up scheme (known as a hybrid plan). This solution is only available to those who have expendable income. For example if someone aged 60 was working for another five years then it could be prudent for an interest-only Lifetime mortgage which converts to a fully rolled-up plan in five years.
Enhanced
If you, or your partner, have health conditions or are a smoker then it could be possible to release a higher percentage loan-to-value. Qualifying health issues include Heart issues, diabetes or high blood pressure. It is possible that the interest rate charged by the provider could be less too. Example: if you were 55 years old and the maximum LTV was 25% if you had high blood pressure and previously suffered from cancer, the maximum you could borrow could rise to 28.5%.
How Much Cash Can I Release?
Is Negative Equity Possible?
Release Tax-Free Cash From Your Home With Conran Mortgages in Shooters Hill
Conran Mortgages will expertly navigate you through the process, step by step.
1
SPEAK TO US
Our equity release expert will have an initial conversation and arrange for a meeting with you.
2
DISCUSS WITH YOUR FAMILY
In the meantime we would encourage that you speak to your family about what you are looking to do. They are welcome to join the meeting if you are comfortable with this?
3
FIRST APPOINTMENT
For us to advise you correctly and ensure a Lifetime mortgage is suitable for you we will need to know lots about you and what you want to achieve. This meeting is purely a fact-finding mission for us both; after all, you need to ensure we are the correct fit to advise you too.
4
FINDING THE MOST SUITABLE PLAN
If you feel Conran Mortgages are the best fit for you, then we will search the whole of market to find the most suitable plan, with the best interest rates, for you.
5
SECOND APPOINTMENT
At this meeting we will present you our recommendation and provide you a personalised illustration for consideration.
6
PAPERWORK
We are not pushy salespeople so if you feel comfortable with our findings and you wish to go ahead then we will happily submit your application to the plan provider. Your property will need to be surveyed by an independent surveyor.
7
MORTGAGE OFFER ISSUED
Once the plan provider is happy they will issue a formal offer which includes full terms and conditions of your plan.
8
LEGALS
You will need advice from independent solicitors to cover off all legal aspects.
9
COMPLETION
Roughly 8 – 12 weeks is a typical timescale, although it cannot be guaranteed.
10
CASH IN YOUR BANK ACCOUNT
It’s your money, go and enjoy yourselves and fulfill your retirement dreams.
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What customers say
Frequently Asked Questions
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What Is a Lifetime Mortgage?
A Lifetime mortgage is the most popular form of Equity Release. The product targets borrowers who are over 55 years old.
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So, a Lifetime Mortgage Is an Equity Release Mortgage?
Yes, absolutely; it is a form of Equity Release which has dramatically improved recently and has become very popular with certain customer types.
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I Thought Equity Release Mortgages Were Bad. Shouldn’t I Avoid These?
Careful consideration is paramount. Equity Release has had a bad reputation since the 1980s; the product has recently become far more flexible and competitive. However, this product only suits some consumers, and we would only take on a client when there is an excellent reason to do so. For clients who are ‘asset-rich’ and ‘cash-poor’, there is a better reason to investigate an Equity Release product. Before you do, we advise looking into all other options so you can make a considered choice with all the facts in front of you.
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Someone Told Me I Should Consider a ‘Home Reversion’ Equity Release Solution. What Do You Think of These?
Our opinion is that we don’t like these products, so we do not advise on this form of Equity Release. A Home Reversion product is when a company buys your home for a fraction of the actual value and allows you to live in the property, with specific rules and restrictions, until you die or go into long-term care.
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When Should I Consider an Equity Release Mortgage?
When there is no other solution. For some, this might be to allow you to retire via an income drawdown; for others, it may be to repay a traditional mortgage when it is not possible to do so in any other way. The fact is, if you are over 55 and you have a need, you should take advice from an Independent Mortgage Broker who has your best interests at heart. An initial conversation should not cost you and will give you an indication if it could be a suitable option.
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Do I Have to Tell My Family and Dependents That I Am Seeking an Equity Release Mortgage?
We strongly implore you to work with your family and beneficiaries when taking on an Equity Release mortgage. Families want you to enjoy what you have built over the years and encourage you to enjoy retirement. Many borrowers are vulnerable, and having family and friends as part of the transaction will likely help you make the best decision. Whilst we strongly advocate for family involvement, some clients feel it is none of their business and wish to proceed without their involvement. We take each case on its own merits and, as responsible advisers, will only do the right thing for our clients.
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What Can I Spend My Money On?
Anything legal. Our findings, from historic client needs, are that they use the monies as follows: * Repaying a traditional mortgage * Facilitating retirement via a lump sum and/or drawdown solutions * Gifting to their children to reduce * Inheritance Tax while allowing them to enjoy their legacy whilst still alive * School fees and education for grandchildren * Home Improvements * Clearing debt * Buying an overseas property * New car * Holidays
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I Am 68, and My Existing Mortgage Lender Tells Me I Must Repay an Interest Only Mortgage. What Are My Options?
This is dependent on your financial position. If you have sufficient income to service a mortgage, we typically look to see what traditional mortgages are available to you until you are older; this is likely the cheapest option. Alternatively, a retirement Interest Only mortgage might be a solution – see: https://conranfinancial.co.uk/retirement-interest-only-mortgages/ However, if you cannot service a mortgage, we consider other options, such as uncrystallised pensions or downsizing. If we cannot find a better solution, then a Lifetime Mortgage may be the best solution. A lifetime mortgage will generally compound the debt, but many plans allow you to overpay or allow interest-only payments to stop this. A Lifetime Mortgage is personal to you, and careful thought and expert guidance are necessary.
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Can I Still Move Home if I Have an Equity Release Mortgage?
Yes, it is possible, and generally speaking, it is to allow downsizing when needed. Many lenders allow “downsizing protection”, which ensures there is no redemption penalty for complete peace of mind. There is a caveat that the new property must be suitable security for the lender, and there are exemptions for certain property types.
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Can I Make Interest Payments With an Equity Release Mortgage?
Yes, this is a recent feature with Lifetime Mortgages. Historically, these mortgages only allowed the interest to compound, snowballing the loan. However, most lenders will allow you to repay the interest or a certain percentage as a lump sum each year. This gives you choices!
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I Need an Equity Release Mortgage but Also Want to Leave an Inheritance for My Kids. Can I Still Do This?
Another advancement is that this is now possible. Lenders call this “Inheritance protection”. This ring fences a percentage of the property, so when it is sold in the future, it guarantees a legacy for your beneficiaries whilst you use the remaining percentage to enjoy your retirement. Please take advice – more details of this benefit is in our brochure here – https://conranfinancial.co.uk/wp-content/uploads/2022/05/Low%20res%20_Lifetime%20Mortgage_brochure.pdf
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I Am Retiring and Heard I Can Use My Property to ‘Drawdown’ Retirement Income. Can I Seriously Do This, and How Does It Work?
Yes, you can, and it is a popular choice to facilitate retirement. I am guessing you have been lucky enough to have enjoyed much growth in your property over the years, which means you can use a drawdown-styled product. In a nutshell, this works where you take an initial lump sum and then make drawdowns at a future date which you use as income. You will only pay interest once you take the monies; typically, the rate is the market rate at the time of drawdown. Expert advice is paramount.
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How Much Cash Can I Release Using a Lifetime Mortgage?
This depends upon your age(s). Someone who is 55 can take a far smaller amount than someone who is 85. It is based on life expectancy as the lender will wish to get their monies returned at a future date along with their interest. If you are in ill health, some lenders offer an “enhanced” underwriting product which could result in you being allowed to borrow more money.
If you wish to take a maximum amount for your age(s), a lender will likely charge a higher percentage of interest to reflect their risk.
Most Lenders offer a “non-negative equity” guarantee, meaning that when the property is finally sold to repay the mortgage (usually upon death or going into long-term care), there won’t be a debt against your estate. -
How Long Does It Take To Get One of These Mortgages?
Typically, it takes between eight and twelve weeks. We follow a strict code to ensure our clients are protected. This involves an independent solicitor visiting you to ensure you have taken all risks into account and that you have the capacity to reach a sound financial decision, and that you have not been pressured to do so – quite rightly.
There is a journey, and if you look at this web page – https://conranfinancial.co.uk/equity-release-mortgages-service/ then you will gain a better understanding. -
What Will Conran Mortgages Do to Help?
We are experts in this field and hold professional qualifications to expertly guide you.
As a local business, we want the best outcomes for our clients. We work on referrals, and integrity is essential.
We undertake a fact-finding mission with every customer and look at all options before we make a recommendation. It must be entirely suitable for you.
If there is a viable solution, we prefer to meet with you and a family member who could also be a beneficiary – they would typically have your best interests at heart and are trustworthy. We would run through the options with you and allow you to make a considered choice in your own time.
We never put undue pressure on our clients and allow them to return to us when ready.
We are entirely independent and have the best products in the market available.
If you are taking an initial mortgage advance over £60,000, then we do not charge any broker fees – this is unusual and something we are proud of!
If you want to have a conversation, please call or complete a form on this site, and we will be in touch.
Equity release – lifetime mortgages – Shooters Hill
- Conran Mortgages offer lifetime mortgages, which is a loan secured against your home. Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits.
- You should always think carefully before securing a loan against your home
- Our equity release advice relates to plans with an initial advance of £60,000 and above. For any advances lower than £60,000, our fixed advice fee of £699 is only payable on completion.
Later life mortgages – Shooters Hill
- A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage. You should always think carefully before securing a loan against your property