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Mark Gregory, Founder and CEO at Equity Release Supermarket
www.equityreleasesupermarket.com
Tel: 0800 678 5955
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Question
How to find out how much I can borrow
I’ve been trying to research the deals that are available with equity release but I am struggling to find any meaningful information.
There are lots of companies advertising on search engines that they can find you ‘the best deals’ but they don’t.
They simply passed my details onto equity release companies. And I can only find basic calculators with companies that advertise on TV. Any help would be greatly appreciated!
Answer
I can understand your frustration as sadly the equity release industry could do much better when it comes to providing consumers with the information they need, to help them decided if equity release is right for them.
There are many dubious companies advertising their services, when in reality these are lead generators – not equity release advisers – who sell your data to the highest bidder.
At Equity Release Supermarket, I’m proud to say that we never buy leads from such companies, and we’ve always prided ourselves on providing you with the widest range of free to use calculators and tools available in the market.
That said, our calculators only give you a rough idea of what you could borrow, and that amount isn’t based on your personal circumstances. That’s why we’ve developed the UK’s first, free to use equity release search engine – smartER.
With smartER, you simply need to input your personal details, some information about your property and your plans for your money. Instantly, smartER searches the entire equity release marketplace and presents a shortlist of plans – specific to your needs. Your shortlist details the best deals for you and shows you how much you could borrow. You can also filter your results to further personalise your plans and create an account to ‘play around’ with the numbers – whenever you want to.
So, I would highly recommend that you try smartER, as I’m sure it will provide you with the answers you’ve been searching for.
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Question
Equity release: Will I lose ownership of my home?
I have been reading about equity release as a possible way for my wife and me to enhance our retirement income. I am concerned about who will own our home, however, if we take out a plan.
We would be reluctant to proceed if we were to relinquish ownership of our property, which has been our family home for almost four decades.
Answer
I can put your mind at rest straight away because with a lifetime mortgage (the most popular type of equity release plan) you retain 100% ownership of your home.
Therefore, you are able to continue to live in your family home as long as you want to. Should you need to move in the future, then your equity release plan is portable, and you can simply transfer it to your new home (subject to the new property continuing to meet the provider’s lending criteria).
With a lifetime mortgage, you only need to repay the lender the amount borrowed, plus accrued interest, when the last surviving partner dies or moves into long term care.
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Question
Can I release further funds later down the line?
I have a house worth £450,000 in a suburb of south London and I would like to release £70,000 as part of a lifetime mortgage/equity release.
However, I currently in my mid-60s (just retired) and was therefore wondering if I may need to access more funds later down the line. Is this something I could possibly do? Or would I need to release all the money at the start of the plan?
Answer
Given the value of your property and the amount you are looking to borrow, you should have no problem taking out an equity release plan – subject to a satisfactory valuation of your property.
I’ll assume that you’re 65 and at this age you could borrow up to 41.3% of the value of your home – which is £185,850.
You have a couple of options to consider when it comes to further borrowing at a later date and our advice is always to borrow what you need, rather than what you want.
Firstly, you could look at a drawdown lifetime mortgage, which as its name suggests allows you to borrow money over time. With a drawdown plan, the lender calculates the maximum you are able to borrow, which is then held in a cash reserve facility.
Once you have taken your initial lump sum (minimum of £10,000), the remaining amount is then left in this cash reserve for you to dip into whenever you needed additional funds. This can be as often as required, where the minimum withdrawal can be as low as £500.
The lender won’t charge you a fee for this, but it is worth mentioning that you’ll be charged interest on any new drawdown borrowing at the prevailing rate of the time.
The beauty of the drawdown lifetime mortgage is that you are only charged interest on the amount borrowed, so they are ideal if you don’t initially need to borrow the maximum available to you.
Alternatively, you could borrow the £70,000 now, don’t take the drawdown option, and instead take an additional further advance in the future.
The disadvantages of doing this are that you’ll have to receive financial advice again and the other costs associated with equity release will apply – such as solicitors and valuation fees.
The ability to borrow again will also be dependent upon the value of your house at the time. Moreover, the interest rates available may be different to the all-time low rates we are seeing in the market at the moment.
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Question
Valuing my home for equity release meeting
I am about to book a meeting with an equity release adviser but before I go ahead and pick up the phone to make the call I wondered what information I should have to hand?
I am particularly interested in understanding whether I would need to provide a valuation or whether the provider will make their own.
Should I get valuations from three estate agents or would a quick scan of similar homes which have sold locally suffice? Any advice would be much appreciated.
Answer
You really don’t need to have any information to hand before you speak to an adviser, and you certainly don’t when you speak to one of our expert advisers at Equity Release Supermarket. They will guide you through the process, every step of the way.
That said, if you want to, there is a wealth of content and tools on the Equity Release Supermarket website that will help you research the market and give you greater confidence before you speak to an adviser.
We have also just launched our smartER tool – which is the UKs first, equity release search engine and allows you to fully research plans that could be right for you, based upon your personal details.
Regarding your question on valuing your house. Just as with a residential mortgage, the lender will arrange for the valuation to take place and so there is no need for you to look into this yourself or go to any unnecessary expense.
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