Pros and Cons of Equity Release in Newcastle

Equity release in Newcastle has gained negative attention over the years, largely due to how it was handled in the past.

That being said, with the regulations brought in by the Financial Conduct Authority and the standards set by the Equity Release Council, the perception of equity release in Newcastle is finally improving and is now a popular option for many homeowners.

Despite this, there are still mixed opinions online, which may lead you to wonder about the pros and cons of equity release in Newcastle.

In this article, we will take a look at the advantages and disadvantages to help you determine whether it is the right choice for you.

What are the benefits of equity release in Newcastle?

Taking out an equity release plan offers many benefits for later life applicants, such as being able to access the equity that has accumulated within their property.

At Newcastlemoneyman, we offer equity release in Newcastle through a lifetime mortgage, which can be received as either a tax-free lump-sum or as a tax-free drawdown facility.

Monthly interest payments are required during the lifetime mortgage, but these can be flexible and deferred, allowing you to have more expendable cash.

That being said, making payments can result in more funds available for an inheritance when you pass away or move into long-term care.

Equity release in Newcastle is now more secure than in the past, with safeguards put in place by mortgage brokers, lenders and the Equity Release Council. As members of the council, we adhere to their product standards.

Equity release can also be a lifeline for interest-only mortgage holders who are unable to remortgage or use other options available to other homeowners.

With a lifetime mortgage, you can pay off the capital balance and release the accumulated equity. This allows you to worry less, as the lifetime mortgage is repaid by selling the property when you pass away or move into long-term care, with the added benefit of a no negative equity guarantee.

What are the downsides to equity release in Newcastle?

Equity release in Newcastle, like any financial product, has its own set of potential drawbacks that must be taken into account before making a decision.

One of the major downsides is that if you let the interest accrue, it will erode the equity in your property, which could reduce the inheritance available to your beneficiaries when the property is sold.

Whether you pass away or move into long-term care, leaving an inheritance may be a top priority for many people, so it is essential to remember that even if you initially ring-fence some of your equity, there may not be much left afterward.

It’s important to note that not everyone who takes out an equity release plan will die before their property is sold. In some instances, people may need long-term care, and if the interest has accumulated over time, the proceeds from selling the property may not be sufficient to cover the cost of their care.

Another potential downside is that taking out an equity release plan may affect your eligibility for means-tested benefits, as the equity in your property will be factored into your financial assets during an assessment.

If you’re currently receiving benefits, it’s critical to seek advice from a financial advisor to understand how an equity release plan could impact your eligibility.

Ultimately, whether equity release in Newcastle is appropriate for you depends on your individual financial situation and goals. Therefore, it’s crucial to carefully evaluate all the potential benefits and drawbacks before deciding.

Is equity release in Newcastle a good idea?

Whether equity release in Newcastle is the right option for you depends on your individual situation and goals. Unlike traditional mortgage lending, you cannot apply for equity release directly; instead, you must obtain equity release advice in Newcastle through a later life mortgage broker.

The reason for this is that while equity release may be a good option for some, it may not be suitable for others and can be quite costly. By speaking to a later life mortgage advisor in Newcastle, your lifetime mortgage will be tailored to your specific needs and plans.

Both equity release and lifetime mortgages in Newcastle are generally flexible and can be customized to meet your goals. Your later life mortgage advisor will also explore alternative options, including conventional or unsecured lending, before discussing equity release as an option.

The Benefits of Equity Release Advice in Newcastle

If you’re uncertain whether equity release or another option is best for your future plans, seeking professional equity release advice in Newcastle from a qualified later life mortgage advisor is a wise choice. They can evaluate your current situation and provide the best guidance on how to proceed.

By taking equity release advice in Newcastle, you can minimize future risks with your later life mortgage advisor taking appropriate steps to plan around any future decisions, such as ring-fencing inheritance.

Furthermore, equity release advice in Newcastle can be helpful for younger borrowers to avoid potential pitfalls by considering holistic or phased entry into later life lending.

For those who do not meet the age bracket for equity release or are better suited for an alternative, over 50’s mortgages, such as term interest-only, retirement interest-only, or other conventional mortgage options, may be available.

Your later life mortgage advisor in Newcastle will be able to advise you on the best option based on your needs and objectives.

Your security and protection are their top priority, and they will ensure that you are well-prepared as you enter the later stages of your life.

To understand the features and risks, ask for a personalised illustration.

A lifetime mortgage in Newcastle 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 be repayable upon death or moving into long-term care.

A Guide to Remortgages in Newcastle: Top Reasons to Consider

The mortgage journey is a rewarding process. Despite its fair share of up and down’s, you will end up with one of the following:

No matter which path you take on. There will eventually come a time when your mortgage term is approaching its end. Your option is to sell up and upsize/downsize into a new property.

Maybe you are looking to sell your portfolio to the tenant or another buyer and look at other opportunities? The most popular option, however, is a Remortgage.

What is remortgage?

A Remortgage is where you use the proceeds from a new mortgage to pay off a pre-existing mortgage. It can be an excellent way to find lower interest rates and better mortgage terms.

Utilizing the 20 years or so experience with Malcolm Davidson (Director / Mortgage Advisor), we thought it best to put together a quick-thinking guide to all the options you could choose when it comes to taking out a Remortgage.

Remortgage for Better Interest Rates

Your initial mortgage deal will typically last 2-5 years and feature low fixed rates or possibly discounted rates. In some cases, you may even get placed on a tracker mortgage, which follows the Bank of England’s base rate.

When your term ends, you will likely get moved along to the lenders Standard Variable Rate (SVR). In short, an SVR is a mortgage with an interest rate that can change depending entirely on what the lender wishes to charge.

In any case, this does not follow the Bank of England’s base rate like a tracker mortgage. We find; these are usually the most expensive paths to take, leaving many to look at Remortgaging for better rates, which will hopefully save you money on your monthly repayments.

Remortgage for Home Improvements

2-5 years into occupying your home, you may decide that something isn’t quite right. Maybe you need an extra room or larger living space for your kids/belongings, a new kitchen, a new office, or loft conversion.

Rather than you move into a larger house, consider seeking advice to release equity with a Remortgage to cover the costs of these. Though it may seem like a frightening concept having to obtain planning permission and fund/manage your project.

You could argue it’s a lot less stressful and more rewarding than the process of finding a new home. Selling your current one and moving your belongings.

In the long run, this may prove even more beneficial as creating more space and will likely increase the value of your property, handy for if you ever do decide to sell up or rent out.

Remortgage for Changes to Your Term

In some cases, people may wish to Remortgage in Newcastle for a better mortgage term, by reducing the length or switching to a more flexible product.

Reducing the size does mean you won’t be paying back your mortgage for as long, so aren’t entirely tied down forever, but as such your monthly repayments will be a lot higher. The longer your term, the lower the payments will be over time.

Remortgage for Changes to Your Term

Some opt for a more flexible mortgage term when they remortgage. The benefits provided by this option can prove appealing to some homeowners. You may gain the ability to overpay,

Resulting in being able to pay your mortgage off as quickly as you’d like, as well as being able to carry the same mortgage and rates over to another property, should you decide to move at any point in the future.

Though a flexible mortgage sounds near perfect, they usually come in the form of a tracker mortgage, which as mentioned earlier on follows the Bank of England base rate. Meaning one month of your payments could vary based on interest, making them a little unreliable.

Remortgage to Release Equity

Everyone has a level of equity in their property, how it works is with a difference between the remaining total on the mortgage, and the current value of the property.

As touched upon briefly, you can choose to opt-in for some for home improvements; however, there are more options available for you out there.

Some use it to cover long-term care costs, to supplement their income, to have a holiday, to pay off an interest-only mortgage, or to have free spending money.

In some cases, we find that Buy-to-Let landlords will use a remortgage to release equity as a means of covering their deposit for buying a future property to add to their portfolio.

If you are aged 55+ and currently living in a property with a minimum value of £70,000, then it’s worth taking a look at your options for Equity Release in Newcastle. To find out if you qualify for later life lending, book your free mortgage appointment and chat with a later life mortgage advisor in Newcastle.

Remortgage to Consolidate Debt

On the topic of a remortgage to release equity, another big one people use it for, is to pay off any unsecured debts you may have accrued over time.

Firstly though it may seem easy enough, Debt Consolidation bases not only the amount on how much you’re entitled to and the value of the property, but also your credit rating. Additionally, this could mean you are limited in the amount you can borrow.

Secondary, to pay off your previous mortgage and your debts, you will need to borrow more than your outstanding mortgage amount. In any case, your monthly repayments will most likely be higher.

Though not an ideal situation, at least you can rest assured that should you find yourself dealt an unfortunate hand, you do have some options out there.

Should you find yourself with a significantly damaged credit rating, you do still have options to choose from. However, these will not be easy and require very Specialist Remortgage Advice in Newcastle before going forward.

Even then, there is no guarantee. You should always seek mortgage advice in Newcastle before choosing to consolidate and secure any debts against your home.

Free Remortgage Review

If you are reaching the end of your term and are wondering what your option may be for Remortgaging. It is worth your time to Get in Touch with an experienced and trusted mortgage broker in Newcastle.

An advisor will be able to discuss your circumstances and future goals to create the best plan of action for you in the next step of your mortgage journey. We aim to ensure this process quick and smoother approach than your first time. & Newcastlemoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.

UK Moneyman Limited is Registered in England, No. 6789312 | Registered Address: 10 Consort Court, Hull, HU9 1PU.

Authorised and Regulated by the Financial Conduct Authority.

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