Equity release mortgages work by allowing you to continue living in your home even after you’ve unlocked some equity in your home, allowing you to make major purchases, clear debts, make home improvements or go on a holiday of a lifetime.
Equity release products enable you to unlock the value (or equity) that’s built up in your home over time as a tax-free lump sum. You don’t have to make monthly repayments as you would with a traditional mortgage (although you can choose to, depending on the lender) and the amount is typically repaid when you move into long-term care or die.
If you’re wondering how to release equity from your mortgage, get in touch with the Create Finance team to discuss your options. We are experienced and professional brokers with access to a wide range of specialist lenders, enabling us to find our clients the best deal to suit their specific circumstances.
Equity release mortgages work by allowing you to continue living in your home even after you’ve unlocked some equity in your home, allowing you to make major purchases, clear debts, make home improvements or go on a holiday of a lifetime.
Products with no negative equity guarantees can be beneficial, as they mean that when the property is sold, if there isn’t sufficient to settle what’s owed your estate won’t have to make up the shortfall. Get in touch with us today to find out more.
Later life mortgages are those aimed at homeowners over the age of 55 that allow you to borrow money based on the value of your property… all while allowing you to continue living there. These products include retirement interest-only and lifetime mortgages.
Despite careful planning and saving throughout your life, you may well find that you face a shortfall in retirement that gets in the way of your chosen lifestyle - and this is when researching how later life mortgages work could prove particularly beneficial.
Later life mortgages allow you to free up some cash without you having to sell your home and move elsewhere. Many of the fundamentals of these products are the same as those associated with traditional mortgages and you’ll need to demonstrate that there is sufficient value in your home to cover the amount the lender is offering you.
Evidence will also be required to show you’re able to afford monthly repayments, where applicable. One key difference is that those on standard mortgages make payments to own more of the property in its own right, whereas a lifetime mortgage will use the property to pay off the loan after you die.
Lifetime mortgages and retirement interest-only mortgages are both types of equity release, allowing you to free up some of the value locked up in your home so you can enjoy a tax- free lump sum of cash to spend as you wish.
With retirement interest-only, you pay the interest each month so the amount you owe won’t increase over time. The loan doesn’t have to be repaid until you or the last remaining borrower dies or moves into long-term care.
With lifetime mortgages, cash in property is also released tax-free, but there are no monthly repayments to be made. Interest is paid back on the loan when you die or move into a care home. This may mean your beneficiaries will have to sell the house in order to settle the debt.
If you’re on a fixed-term mortgage, whether that’s two, three or five years, it is possible to release equity from your home. Talk to your current or new lender to see how much you could increase your mortgage loan by and if you’re able to release the amount of equity you’d like to.
Staying with your current lender is known as a product transfer and if you choose to borrow more, this is known as a further advance. It can be beneficial to use a specialist mortgage broker to help you find the best rates available.
If you own a buy-to-let property, you are able to access capital in the house via equity release. This is not the same as the equity release products that are available for homeowners over the age of 55. Many landlords opt to remortgage investments to enable them to buy additional property.
You may also be able to get a further advance from your current lender as an alternative route or release equity using a secured loan. If you’d like any further help or advice, get in touch with Create Finance today.
Think carefully before securing debt against your home, your home
may be repossessed if you do not keep up repayments on your mortgage.
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Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK. The overall cost for comparison is 4.8% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration.
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