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Equity release, transfer of equity and re-mortgaging
No-one knows what life may throw at us, and you may find yourself in a situation where you are looking for an injection of funds. Releasing or transferring equity, or re-mortgaging your home is a big step, but one that can help you with any financial needs you have.
We explain each solution here, but would always welcome a conversation with you to discuss this further.
This is a complex area of law, however we have the expertise to advise and guide you through the legalities in a friendly and helpful manner. There are two main types of equity release scheme available to you; home reversion plan or lifetime mortgage.
A home reversion plan means that all or part of your home is sold to a private company and in return you receive a cash lump sum, an income or both. Under this plan, you would remain in your home rent free or for a nominal monthly rent until the property is sold. At this time, the private company would receive the proceeds of the sale, depending on the share of the property that you sold.
A lifetime mortgage differs as instead of selling, you would borrow against the value of your home, which again could be paid as a lump sum, income or both. You can continue to live in your home and will retain full legal ownership, and the loan does not need to be repaid until you pass away or move in to alternative accommodation. We can advise you as to the interest rates under this type of equity release scheme, which will be charged at a fixed rate and is added on to the total of the loan.
When entering into either type of scheme, you will need to consider the impact the lump sum or income will have on your welfare benefits, Capital Gains Tax, Income Tax and Inheritance Tax; an area we can discuss with you.
If you are considering equity release, we can review with you any other alternative solutions before you commit. For example, if you are looking for funds in order to repair or adapt your home, there may be other sources of finance available to you through your local authority, Home Improvement Agencies or the Home Improvement Trust. You may be able to raise capital by selling a part of your home, for example the garden. We can help you consider all of the options available to you and if you decide to proceed with equity release, we will guide you through every step of the way.
Transfer of equity
We can help with transferring your interest, or in obtaining someone else’s interest in a property, whether through a Court order or mutual agreement. You may be seeking to transfer equity as you wish to add your children to your property, if you have married or entered a civil partnership and would like to add your new spouse to the mortgage, or if your relationship has ended and you wish to “buy out” the other party.
When leaving the mortgage, you will receive your percentage share of any equity, if there is any. When looking to buy out the other party, you may need to re-mortgage in order to do so.
If you are looking to transfer equity due to a divorce, we can work closely with our Family team to ensure your whole journey runs smoothly.
Once the transfer has been completed, the new legal title will show the new division of ownership. No matter the reason for the transfer, we can discuss your options and advise the best way of transferring depending on your intentions.
Re-mortgaging is often changing mortgage lenders to release some of the equity in your home, or consolidate your debts, but without moving home. There are other reasons why you may be seeking to re-mortgage; perhaps the value of your property has increased, your current deal is about to end or you are looking for better interest rates.
When re-mortgaging, you may stay on the same mortgage rate but move to a different product, or you may move to a better rate. We can advise you on the procedures and on any early redemption penalties on leaving your current scheme, taking your personal situation into account throughout, leaving you with the right decision for you.
We are on most mortgage panels and act for a variety of different lenders, so we are well placed to discuss all of the options available to you. For more information on how we can help you, contact us using any of the following details:
Fareham: 01329 222096
Southampton: 023 8071 7449
Portsmouth: 023 9275 3575
Chandler’s Ford: 023 8071 7467
Waterlooville: 023 9277 6569