Equity release in Durham offers two primary avenues: lifetime mortgages and home reversion plans. These products differ in their mechanisms but share a common rule – they’re only accessible to individuals aged 55 and above.

For those considering later life mortgage options, this age restriction might mean exploring alternative solutions for the time being. Thankfully, there’s a range of mortgages tailored for the over 50s in Durham, and even if you’re under that threshold, viable options exist.

Alternatives to Equity Release

Exploring options below the age of 55 unveils a wide variety of choices. Some are age-restricted, requiring applicants to be over 50, while others cater to younger individuals as well.

It’s important to assess your financial circumstances and objectives carefully before selecting the right option, as each comes with its own set of advantages and disadvantages. Engaging a later life mortgage advisor in Durham can provide personalised insights based on your specific situation.

Downsizing

Downsizing by selling your current property and purchasing a smaller, less expensive one is a way to access equity without taking out a loan.

Personal Savings

Leveraging savings or investments to cover financial needs instead of borrowing against your home is another viable strategy.

Interest-Only Mortgage

Transitioning to an interest-only mortgage in Durham can reduce monthly payments, but a plan to repay the capital at the term-end is necessary.

Retirement Interest Only (RIO) Mortgages

Retirement interest-only (RIO) mortgages in Durham allow retirees to release equity without making monthly repayments. The interest accrues and is repaid when the property is sold.

Term Interest Only (TIO) Mortgages

Term interest-only (TIO) mortgages entail paying only the interest each month, with the original loan amount repaid at the end of the set term, typically around 25 years.

Second Charge Mortgages

Second mortgages in Durham, also known as secured loans, enable homeowners to access equity for home improvements or debt consolidation by borrowing against their property.

Secured Loans

Secured loans are backed by an asset, usually the borrower’s property, and can be utilised for various purposes such as home improvements or significant expenses.

Conventional Mortgages/Remortgages

Conventional mortgages and remortgages in Durham are standard home loans used for property purchase or refinancing, with the property itself serving as collateral.

When is equity release in Durham the right option?

When reaching the minimum age for equity release in Durham, it’s vital to note that it’s not a universal solution. There are instances where homeowners might consider an equity release plan:

  • Enhancing Retirement: Improve your quality of life without selling your home.
  • Home Upgrades: Finance renovations or essential repairs.
  • Enjoying Life: Fulfil travel dreams or support family milestones.
  • Home Modifications: Make your home more accessible and safe.
  • Mortgage Resolution: Pay off an interest-only mortgage.
  • Early Inheritance: Provide financial relief to family members.

Seeking guidance from a later life mortgage advisor in Durham will help tailor the solution to your needs.

Pros & Cons of Equity Release

Equity release in Durham provides several benefits, including unlocking tied-up equity without monthly repayments. You can continue living in your home while receiving funds, usually tax-free, for various purposes like home improvements or debt consolidation.

However, consider the impact on inheritance for your family and potential effects on means-tested benefits. As members of the Equity Release Council, we offer a no-negative equity guarantee, ensuring your family won’t owe more than your property’s value.

To understand the features and risks, ask for a personalised illustration. Equity Release in Durham may come in the form of a lifetime mortgage or home reversion plan.

A lifetime mortgage in Durham 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.

A home reversion plan involves selling all or part of your home to a plan provider in exchange for a tax-free lump sum.

Date Last Edited: February 23, 2024