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From your first mortgage payment, you will start building up equity in your home. Equity is simply how much money you have put into your house. You work out the equity in your property by taking the total amount left on your mortgage and deducting it from your total mortgage amount.
Equity is essentially equivalent to cash, it’s just built up inside of your home. For example, if you release equity from your property, you will receive a lump sum of cash.
This lump sum of cash can be spent however you would like. As a mortgage broker in Bristol, we often see that property owners use this money to pay off unsecured debt, go on holiday or gift the money to a family member to use for a deposit to purchase a home.
When releasing equity from your property, if you are below the age of 55, you will have to remortgage to receive your lump sum. If you are over 55, you will receive your equity in instalments in the form of a lifetime mortgage.
Providing that you’re living in your primary residence, you could be eligible for a Lifetime Mortgage. Here you can select a portion of the equity for yourself and then a portion for the family inheritance.
With a Lifetime Mortgage, you don’t necessarily have to pay back your monthly repayments, you could just let the interest build up. The loan only becomes repayable if you pass away, move into long-term care or are declared unable to take care of yourself without assistance.
Remember that you will have to pass certain requirements before being able to take equity from your property. Your age and property value will be the main factors that affect how much you can withdraw from your home.
Equity Release is a specialist topic and we would advise getting mortgage advice in Bristol before trying to release equity from your home. Our mortgage advisors in Bristol are more than happy to try and help you! Give us a call or book a free mortgage appointment online today.
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.
There are lots of different reasons why someone may want to release equity, it does not just come in the form of a Lifetime Mortgage. Here are some popular options that we often come across:
If you manage to meet the criteria for a lifetime mortgage, you may be able to use the equity to pay off the remaining balance of a mortgage. This can sometimes be achieved even if you have not finished your mortgage term.
Your affordability will be assessed during your mortgage application; your affordability could be affected due to the fact that you have another large financial commitment in your name. This could limit the total amount you are able to borrow.
Secured debt is money that is stored against an asset. An example would be your mortgage payment against your property. Unsecured debt is something such as a personal loan, as it is not secured against any assets.
If you have unsecured debt in your name, it may be possible to release equity from your property to relieve some of this debt.
If your home needs some improvements or a makeover, it may be possible to use the equity in your home to fun home improvements, modifications or alterations.
This process works similarly to if you remortgage to find a better rate, you will likely be put on a repayment mortgage. You are essentially remortgaging for home improvements.
Usually, people choose to invest in home offices, conservatories, garden improvements, extensions, new living rooms and kitchens, or additional garages.
It’s also possible to spend your money on something different such as a new car, a holiday or two, a wedding for yourself or relatives. Remember that it is your money so you can spend it however you’d like!
Our mortgage advisors in bristol are more than happy to answer your Equity Release questions. All that you need to do is book a free mortgage appointment online and an equity release advisor will be in touch.
We would recommend getting mortgage advice in Bristol so that you are aware of the whole process and exactly how it works. We have over 20 years of experience in the mortgage sector; our advisors will be able to answer your question.
Equity release is a complicated subject, and that’s why it’s best to get a second opinion and ask a question.
Our job is not just to try and find you a better rate, we will also help you through the whole process. We have specialist equity release remortgage advisors in the moneyman team that would be more than happy to take your call and talk you through the remortgage options.
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We will hold your hand from start to finish. Our team will be on-hand throughout the process to make sure that you feel comfortable and secure throughout the whole process.
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5.00 Rating3 Reviews
Very responsive even in late evenings! Answered all of the questions that I had, explained the whole process through out and made the house buying process so much easier!
Spoke to several Mortgage Brokers about my situation and having talked to Malcolm, he fully understood my views and gave me his honest opinion. A very professional, friendly, and efficient service that enabled us to the best mortgage on the market.
Helen was lovely to chat with, she booked me in for an appointment with a broker within minutes of me sending an email enquiry on a Sunday and explained everything about the process really well.