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Equity Release in West Sussex

Lifetime Mortgages, Home Reversion, and General Equity Release Advice in West Sussex.

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Equity Release in West Sussex

Before diving into the topic of equity release in West Sussex, let’s take a look at the property market in this area.

When we think of high-value homes in West Sussex, we may be inclined to think of towns and cities such as Chichester and Worthing. However, there are valuable houses and apartments all over West Sussex, making it a profitable place to live.

In the Bognor Regis area of West Sussex, for example, the average property is 35 percent more valuable than the UK average, at £375,227, which is a 19% increase (1).

This may be a result of the pandemic to a certain extent, as remote work is becoming more popular and people are able to choose their location without taking their employment into account. This means

What does this mean for homeowners in West Sussex? It means properties like yours are becoming more desirable, so the value of your home is likely to continue to rise.

On one hand, you could see this as an opportunity to sell up and move to a different location. However, remember that property prices are rising in most parts of the UK, so your options are somewhat limited.

On the other hand, you could see this as an excellent opportunity to tap into the funds in your West Sussex home by releasing equity. This means you could boost your income without even leaving your home.

Keep reading to learn more about equity release in West Sussex, including what equity release is, how it works, and what you can spend your loan on.

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What is Equity Release?

Equity release is an intimidating concept for some people, but once you get your head around the basics of it, you realise that it is really quite a simple concept, and you will be able to understand how it works in West Sussex.

There are people of retirement age who live in high-value West Sussex homes yet cannot afford to live the way they want to as they do not have a steady income. The equity release scheme was set up to solve this issue.

Now, through equity release, these West Sussex homeowners can take out a loan secured against their property, meaning they are benefitting from the high value of their home.

Instead of being in debt in a traditional way, meaning the homeowner must pay back the money within a certain time frame, equity release consumers do not have to worry about making repayments.

This is because the equity release lender will sell the property at the end of the scheme, and the proceeds first go to the lender to make up for the amount of money the consumer has borrowed. After this, the remaining proceeds can go to family and friends in the customer’s will.

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Equity Release in West Sussex – What is a Lifetime Mortgage?

Lifetime mortgages are the most common type of equity release in West Sussex, and if your property is high in value, you could release a significant amount of money through a lifetime mortgage.

To do this, you need to speak to an equity release adviser and make an application to an equity release lender in West Sussex. First, you will need to select the specific type of lifetime mortgage you are after, as there are many different kinds.

Before you receive your loan, you will have to decide whether you want it in the form of monthly payments or a lump sum of tax-free cash.

Sometimes, the plan will decide this for you, so make sure you are happy with the policy of your preferred plan before you commit to it.

Equity Release in West Sussex – What is a Home Reversion?

Home reversions are another type of equity release in West Sussex. Instead of taking out a mortgage, you sell your home directly to an equity release provider, and they benefit from the increase in value over time.

If there is no increase in value, or if there is in fact a decrease, you will not have to pay more money if there is a no negative equity guarantee in place. No one can predict how your property is going to change in value, so it’s best to have this guarantee to avoid owing more than you or your family can afford.

There is no choice between monthly instalments and a lump sum with a home reversion in West Sussex. You will always receive all of the money at once. This cash sum is also tax-free, and as you are not repaying a mortgage, it is interest-free.

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Is Equity Release Right For Me?

Only you can decide whether equity release in West Sussex is right for you, but we would love to guide you along the way. We encourage you to consider the following questions to help you decide whether this scheme is suitable for you.

Is My Property Valuable?

Equity release lenders need to know that your West Sussex property is going to make them money in the long run, otherwise, it isn’t worth it for them to loan you money.

Some lenders will be stricter than others, requiring your property to meet specific criteria, but all lenders in West Sussex will need to know there is value in your home.

This does not mean your West Sussex property needs to be worth a million pounds by any stretch of the imagination.

It must simply be worth at least £70,000, which will be confirmed by a surveyor who will perform a valuation (if you decide to pursue equity release).

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Am I The Right Age For Equity Release?

Another thing to consider is whether you are the target client for equity release in West Sussex, with specific reference to your age. Equity release consumers must be at least 55 years old, and home reversion customers have to be 65 years old.

There is no upper age limit for most lenders, so don’t worry if you are significantly older than this. In fact, you may be able to get a higher loan if you are an older customer.

Do I Need More Money in Retirement?

If you have plenty of savings and a great pension, it may not be necessary for you to release funds from your West Sussex property. Some people are confident that the money they have will carry them through retirement, and they don’t want to rely on loans to do this for them.

Having said that, we often speak to customers who have been considering equity release for many years and settled on the fact that they had enough money, only to regret this when the cost of living increased.

We advise you to carefully consider this scheme, as it is better to do it earlier rather than later, and enjoy your loan for a longer period of time.

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Am I Prepared to Not Make Repayments?

This may seem like a silly question, as we have explained that no homeowner has to repay their loan when they are using an equity release product.

However, we also know that some people prefer to make repayments for peace of mind, and we don’t want them to select a plan that would punish them for this.

Most West Sussex lenders advise against repayments, but if necessary and if your plan permits it, you may be able to pay back the loan in order to free yourself from the scheme, usually with an additional fee as you have left the scheme early.

If you already know you will want to make repayments, you can plan for this by selecting a scheme that allows it, such as an interest-only scheme or a voluntary repayment scheme.

What are the Risks Involved With Equity Release in West Sussex?

If you apply to an equity release plan in West Sussex without doing adequate research, it can be risky as you may end up disliking some of the policies relating to either the plan you are on or the lender you are with.

Once you have taken out equity, it is difficult to end the scheme, so you do not want to be in this position.

For example, a West Sussex homeowner might choose a lump sum plan simply because the interest rates are lower, but after receiving their loan, they may wish they had opted for a plan with monthly instalments as they are tempted to spend all of their funds in one go.

Another example is that someone could go for an interest-only plan and commit to paying off the full interest each month, but once the scheme starts, they may realise that their income is not high enough to be able to pay back the interest in full, and so the interest-only plan is not suitable for them.

If you speak to an equity release adviser in West Sussex who is regulated, these situations should not arise, as your adviser will make sure you are happy with the plan you have applied for.

This is why we recommend seeking professional advice, as well as asking your loved ones for their input.

Please call our 24-Hour Helpline: 0330 058 1579

How Much Money Can I Borrow in West Sussex?

The amount of money you could borrow in West Sussex depends on your property value, property type, your age, and various other factors that are determined by your lender and plan.

To get a general idea of the amount you could borrow, see our equity release calculator. Select your age, property type and property value, and you will be presented with an estimate of the loan you could take out.

We are also proud to offer personalised quotes to prospective customers for free, so please head to our quote page if this is something that appeals to you.

When Is My Equity Release Loan Due?

As we have described, there is no obligation to repay your equity loan in West Sussex, so there is no due date so to speak. The money will be repaid when your property is sold.

For a home reversion, this process tends to be quick, so you could be looking at a matter of weeks or months. However, properties with a lifetime mortgage can take up to a year to be sold.

Will My West Sussex Home No Longer Be My Own?

Opting for a home reversion in West Sussex means you will no longer be the homeowner, as you have given this title to the equity release lender. This does not mean you have to vacate your home.

On the contrary, you are expected to stay there until the end of the scheme. You may renovate the property if your lender allows this.

As for lifetime mortgages, the homeowner always remains the homeowner, and again, they must live in their home permanently until they pass away or move into long-term care.

Please call our 24-Hour Helpline: 0330 058 1579

Can I Release Equity in West Sussex If I Have a Bad Credit Rating?

If you have a bad credit history, you will unfortunately not be eligible for certain equity release options and certain lenders in West Sussex who perform credit checks. We would still encourage you to check this as it is possible that your credit rating is still acceptable.

What’s more, some schemes do not involve credit checks, so you will be able to find a plan that is right for you even if your credit history is poor.

What Happens at the End Of the Scheme?

The end of the scheme is marked by the last customer either moving into a care home or passing away. The family must inform the equity release provider of this, and then the scheme can begin to be finalised.

The West Sussex property is prepared for sale, which includes removing possessions from the home if there has been a home reversion, and then the lender collects the money from the sale and leaves the rest to the beneficiaries of the equity release consumer.

Please call our 24-Hour Helpline: 0330 058 1579

What are Some Things I Can Spend My Loan On?

Not everyone knows what they want to spend their money on, so we want to give you some ideas. Some of these seem dull, but if you focus on paying for practical things and staying out of debt, you could enjoy your retirement more as you will not be worried about finances.

1. Paying Off Debt

One of the best things to do with your equity release loan is to pay off debt, as this will allow you to spend your money freely without worrying about having to give any of it up.

Of course, you will technically be in debt with your equity release loan, but this is different as repayment is not a requirement.

We would advise paying off your debt sooner rather than later, as this will allow you to enjoy the rest of your equity release funds. If you do it as soon as you receive your loan, you will know how much money you have left to work with for the rest of your retirement.

This only applies if you opt for a lump sum of cash. Otherwise, you could put a large number of your monthly payments towards paying off your debt, or you could set up a cash reserve and withdraw money to repay your debt whenever you want to.

2. Paying For Your Own Care

This is a great idea as there is nothing better to spend your money on than your health.

We recommend this option to clients who cannot currently afford to fund their care, but are aware that there is money tied up in their property that could allow them to do this.

Please consider whether your equity loan would be enough to cover the costs of your care before requesting a loan, as you would not want to end up in a position where you can’t pay for a full care plan. This option is only applicable to clients who want private care in their West Sussex home, not in a care home.

3. Purchasing a Holiday Home

Holiday homes are great for people in retirement as they offer a change of scenery and can give people a new lease of life, especially if the property is located in an area that the homeowner is fond of.

You could even take this a step further and use the property as an official second home, which would allow you to benefit from two properties and two locations in your later years.

We recommend keeping the second property close to West Sussex if you find it hard to travel long distances.

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4. Purchasing a Property to Rent Out

If you use your equity loan to purchase a property to rent out, you could boost your retirement income significantly as you would be receiving a steady rental income.

We recommend doing your research into property markets before doing this, and consulting a financial adviser, as you want to make sure you are getting the most out of your equity funds.

5. Gifting to Family and Friends

You shouldn’t feel obligated to spend your loan on others, as you have worked hard all of your life and you deserve a wonderful retirement. Yet, if it would make you happier to watch the people around you benefit from your equity loan, it can be a great idea to gift money to your loved ones.

Perhaps you could give a lump sum to your grandchildren to help them with university, pay some money into your children’s accounts monthly to help with rent or mortgage fees, or use your loan to purchase wonderful gifts for the people you love.

6. Improving Your Quality Of Life

We know that this suggestion is vague, but we want to keep it open as a great quality of life looks different to everyone. We would suggest making the most of the lovely West Sussex by holidaying in the area or  going on fancy excursions.

Another idea is to spend your funds on travelling around the country, provided that you are healthy enough to do this. You could visit family and friends along the way, making sure to spend quality time with people you don’t see often.

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7. Paying Off an Existing Mortgage

1.5 million adults in the UK have outstanding home loans at the time of retirement, so many people who are interested in equity release will have to figure out how to pay off their current mortgage (2).

If you are one of these homeowners with an existing mortgage, you cannot use equity release products until you pay it off, so why not take out an equity loan in West Sussex and use it to pay off the mortgage you currently have?

This would be a huge weight off your shoulders as you are moving from a mortgage that must be repaid regularly to a mortgage that never has to be repaid while you are alive.

8. Planning For Inheritance Tax

Equity release money is not liable for inheritance tax, so you could take out equity as a way of lowering the tax your family has to pay when they inherit your money.

This could combat any guilt you feel about releasing equity in West Sussex, as many people fear that they would be neglecting their family by reducing the money they will eventually receive, but this is one of the advantages of equity release for your beneficiaries.

Please call our 24-Hour Helpline: 0330 058 1579

Equity Release in West Sussex – How Can I Get Started?

If you are raring to go, please contact us as soon as possible on 0330 058 1579 and we will offer a free initial consultation with a member of our friendly team to discuss your ambitions for equity release in West Sussex.

The application process is straightforward if you have an equity release adviser to help you, as it simply involves answering questions about your financial situation and providing details about your preferences for equity release plans.

We recommend speaking to one of our advisers rather than pursuing equity release in West Sussex alone as they are quick to recognise the drawbacks of different policies, and they will be able to warn you of these drawbacks before you accept an offer from a lender. They can also help you to cut costs by selecting the right scheme for you (3).

What’s more, our advisers are experts when it comes to equity release schemes, so they will be able to quickly identify which plans you should avoid and which ones would be ideal for you, which saves you the effort of making an application and then withdrawing it.

If you are hesitant to talk to us, remember the initial discussion is completely free of charge, and it is not a signal to us that you are committed to equity release in West Sussex. We are happy to discuss it in prospective terms, without putting any pressure on you to make an application any time soon.

We hope this helps you to feel more comfortable with the concept of consultation, and we hope to hear from you soon.

Please call our 24-Hour Helpline: 0330 058 1579

References

[1] Property prices 35 per cent above UK average in Bognor Regis https://www.sussexexpress.co.uk/news/people/property-prices-35-per-cent-above-uk-average-in-bognor-regis-3730704

[2] 1.5m UK adults retire with outstanding home loans – LV= ‘Navigating the cost of living crisis’ https://www.professionaladviser.com/news/4051806/uk-adults-retire-outstanding-home-loans-lv

[3] Five key reasons to seek equity release advice https://www.telegraph.co.uk/financial-services/retirement-solutions/equity-release-service/equity-release-advice/

 

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