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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.

Date Last Edited: April 24, 2023

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