Equity Release Advice Hull
As soon as you start paying off your mortgage, you are building up equity within your home. You can work out the amount of equity in your property by subtracting the amount of your mortgage that you have paid off from the initial mortgage amount that you took out.
For example, if you took out a 95% mortgage (5% deposit) on a £200,000 property and you have paid off £20,000, including your deposit of £10,000 you have put £30,000 into the property. This is the equity within your home. Usually, this is portrayed as a percentage; in this case, you would have 15% equity within your home.
Every homeowner will have a different amount of equity in their home. It all depends on how long they have been paying off their mortgage. In the future, once you have put a lot of money into your property, you may get the opportunity to withdraw some of the cash you have put in. This can be achieved in multiple ways, and they usually differ on the age of the applicant and what they are looking to achieve.
Remortgage to Release Equity in Hull
Those who are only partway through their mortgage may want to release a portion of their equity to gain some extra cash. The way that you can release part of your equity is through remortgaging in Hull.
When it comes to remortgaging, you will need to be starting your process up to six weeks in advance to give yourself chance to prepare for the remortgage process and allow time for your mortgage advisor in Hull to find you a perfect product for you and your property.
The remortgage process is usually much quicker than the typical mortgage process, however, you still need to allow time to switch to a new product. Starting your process earlier will also mean that you avoid falling onto your lender’s standard variable rate of interest. This interest rate is likely much higher than your current rate and the rate you could access if you were to remortgage.
Once you remortgage your property in Hull and release equity, you will be able to do whatever you like with the money. Most people use it to fund improvements for their property, however, some people use it to fund larger purchases such as holidays, weddings or a new car.
When it comes to releasing equity, it is important to weigh up the positives and negatives to decide what the best option is for you.
It is important to seek financial advice before releasing equity.
Equity Release & Later Life Mortgages in Hull
Equity Release is different to releasing equity through a remortgage. The main difference is that you do not have a mortgage on your property to qualify for it. Even if you have already paid off your mortgage, you can still qualify for equity release in Hull.
Like most kinds of mortgages, there are limitations to equity release. You will have to be over the age of 55 and have a property that is worth equal to or more than £70,000. Speaking with a later life mortgage advisor in Hull is essential for equity release.
Equity release comes in two forms: lifetime mortgage and home reversion plan. As a mortgage broker in Hull, we are able to help you with both kinds of mortgages.
To understand the features and risks, ask for a personalised illustration.
A lifetime mortgage may impact the value of your estate and it could affect your entitlement to current and future means tested benefits. The loan plus accrued interest will repayable upon death or moving into long term care.
What makes a remortgage to release equity different from equity release?
When you remortgage to release equity, you will take out a new mortgage on your home with a higher loan to value than what you were previously on. Think of it that you are taking money back from what you have paid into your mortgage. When your new mortgage comes to an end you can either remortgage again or sell up and move home.
If you take out an equity release lifetime mortgage, your mortgage term will be extended over the rest of your life. You are able to withdraw that equity to use as you please with the balance being paid back upon either your death or if you were to move into long term care.
As a mortgage broker in Hull, we have seen how lifetime mortgages have become more flexible over the years and some lenders may allow for you to still move home. If you are looking to achieve this, it is important to speak with a later life mortgage advisor in Hull. Our advisors are able to compare different later life products with on another to determine which option is best for you.
Why release equity from your home in Hull?
As mentioned throughout this article, there are many different reasons why people may want to release equity. Let’s take a look at some of these reasons and how they can be achieved via a remortgage to release equity and through an equity release lifetime mortgage.
Home Improvements
Homeowners may want to invest in their property, particularly if some areas need improvements. Improvements could mean anything from modernising a kitchen to converting a loft to create more space; there are many different ways to improve your home.
Perhaps if you have had a change of personal situation, this option could be more beneficial to you and your situation, for example, if you have decided to grow your family and need more space.
As a mortgage broker in Hull, we would also recommend exploring a remortgage in Hull over moving home in Hull.
Consolidate Debts
If you have built up any unsecured debt, and are finding the repayments hard to manage, you may benefit from releasing a small portion of your equity to pay it off.
The more traditional route to take would be to consolidate this debt into your mortgage so that you pay it off alongside your mortgage payments in more manageable amounts. However, if you don’t want your monthly payments to be increased, using equity from your property could be a faster solution to get it paid off.
When applying this to equity release, we find that later life applicants who perhaps have had their debts catching up to them, will use some of their released equity to simply pay off these debts.
You should think carefully before securing other debts against your home. By adding your unsecured debts to your mortgage, which is secured on your home, you are potentially putting your home at risk if you cannot make the required repayments.
Although the total monthly cost of servicing your debt may have reduced, the total cost of repayment may still have risen as the term of your mortgage is longer than it may have taken to repay the debts originally.
Buying Another Property in Hull
Some homeowners may want to use the equity as a deposit on a new property purchase. This is entirely viable through the power of remortgage and equity release. Whether this property is an investment for a buy to let or for your family to help them get onto the property ladder, releasing equity can give your deposit a huge boost.
You must know that if you choose to take the equity release route to fund the mortgage deposit, you cannot live in this second home, you must only have one place of residence.
Family Inheritance
Equity can also be used to fund family inheritance, although, this is rarely done when people are relating equity through a remortgage.
Later in life, you may want to pass some of your funds on to family members or friends as their inheritance. If the applicant releasing the equity does not have anyone they want to share their inheritance with, we often see that they donate some of it to charity.
Fund Your Retirement
Some people, particularly those with a later life mortgage in Hull, may want to use the equity they have released to fund their retirement lifestyle. This is, of course, less common when remortgaging to release equity.
Furthermore, these funds could be used for the care you may require. This could include both short-term and long-term care.
Book a Free Remortgage Review or Later Life Mortgage Appointment in Hull
Whether you are looking to remortgage to release equity or take out a later life mortgage via equity release, you should speak with a remortgage advisor in Hull or a later life mortgage advisor in Hull. You can book your free mortgage appointment online and select a date and time that best suits you!
We provide a responsive service so that you are able to get in touch with a member of our team 7 days a week. We will also make sure that you are aware of the costs involved with a remortgage and later life mortgages.
To understand the features and risks, ask for a personalised illustration. Equity Release may come in the form of a lifetime mortgage or home reversion plan.
A lifetime mortgage may impact the value of your estate and it could affect your entitlement to current and future means tested benefits. The loan plus accrued interest will repayable upon death or moving into long term care.
A home reversion plan involves selling all or part of your home to a plan provider in exchange for a tax-free lump sum.
Date Last Edited: 11/13/2024
