Releasing Locked In Funds From Your Home To Ease Financial Pressures

Are you feeling the pressure of a shortfall in income? If so, you may be asking whether an equity release mortgage could be used to supplement your income? This would enable you to raise much needed cash and give you the financial support you need. It’s a question that doesn’t have a straightforward answer. There are many factors governing whether releasing equity from your home during and after these unprecedented times is a good thing to do and the right thing for you. Equity release was certainly growing in popularity before the pandemic. This enabled many people to unlock the value in their homes and it could give you the opportunity of releasing locked in funds from your home. The FT Adviser predicts that equity release will continue to boom with the FCA seeing an increasing demand for later life lending.

You may find yourself thinking about an equity release mortgage for a number of reasons:

  • Dividend shares have been stopped/cancelled or are less than usual
  • Your investments and shares are worth less and it’s not a good time to sell
  • Family members need some financial help
  • You want peace of mind of being in charge of your finances
  • The crisis has made you evaluate your life and look at things differently

Are you worried that your income is being affected by COVID-19?

Are you worried that your income and your pension fund income have taken a pounding? You could look at equity release to help you out of your current situation. There are different types of equity release options. Some allow you to draw a monthly income and others where you draw an initial lump sum and perhaps an agreed sum later on.

Equity release can give you the financial flexibility you are looking for

It’s possible to release equity from your home if you meet eligibility criteria. However, it’s a decision that shouldn’t be taken quickly or lightly, although it can ultimately give you the financial flexibility that you are looking for. If you are a homeowner over the age of 55, this will allow you to release some of the wealth that has been built up in your property. The debt is then repaid when you die or move into long term care.

If you are thinking about equity release, make sure you:

  • Take your time to make your decision
  • Make sure you fully understand what equity release entails
  • Ensure you receive individually tailored advice
  • Consider it as a long term transaction
  • Are confident equity release is suitable for your circumstances
  • Discuss with your family and friends

How can Paxton Equity Release help you?

Martin from Paxton Equity Release will be delighted to go through your options to see whether equity release will meet your needs and circumstances and be the right choice for you and your family at this current time. If you would like to know more about releasing locked in funds from your home, please call Martin on 01892 617070 for a chat or email martin@paxtonuk.com

Equity Release Eligibility – Do You Qualify?

Equity release is becoming more and more popular as homeowners look to access some of the monies tied up in their houses. With the increase in house prices over the years, many people are in a situation where they have most of their money tied up in their house. Equity Release appeals to many homeowners as it allows them to maintain full ownership of their home and release tax-free money. In this article, we go through equity release eligibility criteria and whether you would qualify.

Would you qualify for an equity release mortgage?

The factors that affect your eligibility:

  • Age of the youngest homeowner
  • Value of your property
  • Where you live
  • How much you would like released

In a nutshell, if you are 55 or over, and that’s for the youngest person if you are a couple and you own your home in the UK, you may well be eligible for an equity release mortgage.

General equity release eligibility requirements

  • The youngest person, if a couple, must be aged 55 or more for a lifetime mortgage
  • For a home reversion scheme, where lenders become co-owners of your house, the minimum age is 65
  • Your home needs to be valued at £70,000 or more
  • The property has to be in the UK
  • You must be a UK resident
  • The property needs to be your main residence and in good condition and of standard construction
  • Leasehold properties will have to have at least 75 years remaining on the lease
  • You will need to be mortgage free or release enough equity to pay off an outstanding mortgage or loan
  • Freehold and leasehold properties can be considered

How old do you have to be to qualify?

A couple is considered to be if you are married, cohabiting or in a civil partnership and the youngest person must be 55 or more if you require a lifetime mortgage. For a home reversion scheme, the minimum age of the youngest person has to be 65.

What types of property will be considered?

It can be a house, a bungalow, a flat or a maisonette although it must be of traditional construction with the walls made of brick, stone or block and the roof of concrete, slate or stone tiles. But there are specialist lenders who will consider other constructions. Flooding, subsidence or structural issues must not recently have affected it. Properties can be leasehold or freehold.

How can Paxton Equity Release help you?

Martin from Paxton Equity Release will be delighted to chat with you as to whether you would be eligible for an equity release mortgage and if it would be the right option for you and your family. Over a cup of coffee or tea, Martin will talk through with you your different routes for raising money to make sure an equity release mortgage is the right choice for you.

Please call Martin on 01892 617070 for a chat or email martin@paxtonuk.com

 

The Bank of Grandad and Grandma – Would It Be A Good Option For You?

Bank of Grandma and Grandad

We have got used to the expression, “The Bank of Mum and Dad”, with reference to the financial support that parents can offer to their children who are struggling to get onto the housing ladder. However, today it’s grandparents who are increasingly helping family members to climb onto the first rung. A new term has come to the fore, “The Bank of Grandad and Grandma.”

In fact, a survey last year by Santander Mortgages discovered that 1 in 10 first-time buyers are now turning to their grandparents for financial support. This is a big increase from 5 years ago when the figure was just 2%.

Equity Release – Advantageous for the family and grandparents

For many grandparents it is something that they want to do whilst they are still alive, so that they can enjoy seeing younger relatives in a home of their own. Many grandparents are asset rich but cash poor and so it may be an option to consider an equity release mortgage. Here, capital is released from their home without them having to move. This can be a solution that may be advantageous to the family and to the grandparents themselves.

Drawdown Lifetime Mortgages

Quite often drawdown lifetime mortgages are the most popular as they will enable you to release equity when you need it. The interest that this type of mortgage accrues is only repaid when you pass away or you and your partner go into care. The mortgage will pave the way so that you can give your children or grandchildren an early inheritance. It also has the advantages of paying off your mortgage, if you wish and providing you with money during retirement.

What to consider before helping the family

However, as a grandparent, there are things that you must consider before you take on this arrangement.

  • Are you gifting the money or is it a loan?
  • Are you set financially for the future?
  • Can you really afford to lend the money?
  • What will happen if the family member splits from their partner?
  • If you are loaning the money, will the recipients be able to pay you back later?

A Big Decision – Ensure you get the right advice

It is certainly a big step and your generosity and providing the Bank of Grandad and Grandma will almost certainly be really appreciated. However, you must consider your needs as you grow older. This means that it’s important not to gift or loan more than you can actually afford. The decision to take out an equity release mortgage should not be taken lightly. It will impact on the value of your estate and it may even affect your state benefits entitlements.

How can Paxton Equity Release help you?

Martin from Paxton Equity Release is an experienced equity release mortgage adviser and will be delighted to go through your options. He will sit down with you and discuss what is best for you and your family over a cup of coffee or tea. You will then have all the facts to take to your financial advisor should you feel that is necessary. Please call Martin on 01892 617070 for a chat or email martin@paxtonuk.com

You can help your grandchildren with financial support from an equity release mortgage

 

Is An Equity Release Mortgage Right For Me?

 

An Equity Release mortgage for many people is a practical and sensible way of releasing cash from their homes, so that they have the money available to do the things they want to do. However, taking out this type of mortgage shouldn’t be taken lightly and it’s important that you know all of the facts and implications before you commit. An equity release mortgage isn’t right for everyone!

Why would you want to release cash from your home?

First of all, let’s have a look at the types of people this mortgage would suit. And before going any further, you do have to be over 55 and a homeowner.

  • You love your home and want to stay there
  • You need some tax-free cash to enjoy life to the full
  • You want to supplement your income and/or pension
  • You want to give a grandchild a deposit on their first home
  • You would like your family to benefit now, not after you have passed away

An equity release mortgage will allow you to stay in your home

Many people love their home and don’t want to move but find themselves asset rich, but cash poor. With an equity release mortgage, you can continue to live in your home for the rest of your life or until you move into permanent residential care. In most cases, you won’t have to make regular payments unless you actually want to because the amount you owe is paid back from the sale of your home after your death.

You will have cash to enjoy life

The tax-free cash that is released from your home can be used for a host of things ranging from home improvements including an extension or new kitchen, holidays such as a cruise, a new car or caravan, paying off a debt or mortgage or just enjoying days out.

An equity release mortgage will supplement a pension shortfall

The release of a lump sum can be used to supplement your income and pension. When retirement does come around, you may find that you haven’t planned properly and you have a shortfall in monies coming in each month and this is where an equity release mortgage could make up the deficit.

You can financially help your family

Many people want to help their children or grandchildren, particularly if they are struggling to get on the housing ladder. Giving a family member a lump sum could fund their deposit and enable them to make their first purchase. It’s something you would love to do for them now, so they don’t have to wait until you have passed away.

How can Paxton Equity Release help you?

Martin from Paxton Associates will be delighted to go through your options over a cup of coffee or tea so that you can see whether an equity release will meet your needs and circumstances and be the right choice for you and your family. Please call Martin on 01892 617070 for a chat or email martin@paxtonuk.com