Equity Release In Croydon

Equity Release In Croydon | December 2023

Homeowners in Croydon who are typically over 55 can take equity out of their properties through equity release.

People looking to fund home improvements, pay off an existing mortgage, or supplement their retirement income may find this financially helpful product. 

Many people are looking into ways to increase the value of their property due to the rise in housing costs in places like South Croydon and East Croydon.

Table of Contents

Understanding Equity Release

With the help of a financial product called equity release, homeowners can access their homes’ value while keeping their property ownership.

Homeowners in Croydon are adopting lifetime mortgages and home reversion plans as popular equity release products. 

A lifetime mortgage is a type of equity release in which you take out a loan secured by your home and pay it back when you die or enter long-term care. For lifetime mortgages, the interest rate is typically fixed, giving the borrower security over the cost of credit.

Most lifetime mortgages must include a negative equity guarantee. The amount to be repaid will always be, at most, the market value of your home, thanks to this guarantee, which guards against homeowners experiencing negative equity. 

Another form of equity release known as a “home reversion plan” entails selling a portion of your home to a lender while keeping the right to live there rent-free. The property is eventually sold, and the lender gets their part of the proceeds.

Types of Equity Release Schemes

Croydon’s two main equity release programs are lifetime mortgages and home reversion plans. Your age, the value of your property, and your financial objectives will all play a role in determining which of these two equity release options you should choose.

The most popular kind of equity release plan, lifetime mortgages, lets you borrow a one-time large sum or recurring smaller sums against the value of your home. 

You don’t have to make regular payments and keep your home. Instead, the loan and rolled-up interest are paid back when the house is sold.

With a home reversion plan, you can sell all or a portion of your house to a provider in exchange for a tax-free lump sum or ongoing payments.

Until you pass away or enter long-term care, you can continue to live there without paying rent. After that, the house is sold.

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Try Age Partnership’s equity release calculator and estimate how much money you could release from your property

If you take out a product from Age Partnership, we will receive a fee for introducing you to them. This helps support the site and for us to produce more content.

Eligibility for Equity Release in Croydon

In Croydon, you must be at least 55 and a property owner with a specific value to qualify for equity release. The precise property value needed will vary depending on the equity release provider and the kind of equity release product. 

Additionally, you must make sure that your equity release plan won’t have an impact on how you’re taxed or whether you qualify for means-tested benefits. 

You can better understand your options and the possible repercussions of releasing equity from your home by seeking objective financial advice from a qualified financial adviser.

Equity Release in Croydon

Some of the best equity release interest rates as at December 2023

The table below shows you some of the best equity release rates, as at December 2023, for lifetime mortgages, from some of the leading equity release providers in the UK. 

These rates may have changed since this table was updated and should be taken as indicative only. There may also be other providers not listed on this table that could offer better deals.  In addition, the providers and products noted below may not be right for your particular circumstances. Therefore, we strongly recommend that you speak to an equity release adviser, who will be able to provide you with information on the latest rates, that are applicable to you.

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Product NameInterest RateType of productOffers
Just For You – J2.56.22%FixedFree ValuationNo application fee
Just For You – J16.30%FixedFree ValuationNo application fee
Premier Flexible Pearl6.43%FixedFree Valuation
Premier Optional Payment Pearl6.43%FixedFree Valuation
Horizon 240 Drawdown6.43%FixedFree Valuation
Classic Drawdown Super Lite 26.47%FixedFree Valuation
Horizon 260 Drawdown6.47%FixedFree Valuation
Classic Elite Drawdown Super Lite 26.47%FixedFree Valuation
Premier Flexible Pearl6.48%FixedFree Valuation
Premier Optional Payment Pearl6.48%FixedFree Valuation
Horizon 240 Drawdown Fee Free6.49%FixedFree ValuationNo application fee
Classic Drawdown Super Lite 16.52%FixedFree ValuationNo application fee
Premier Flexible Pearl6.52%FixedFree Valuation
Premier Optional Payment Pearl6.52%FixedFree Valuation
Classic Elite Drawdown Super Lite 16.52%FixedFree ValuationNo application fee
Flexible Pearl6.53%FixedFree Valuation
Optional Payment Pearl6.53%FixedFree Valuation
Enhanced Lifestyle Flexible Option6.53%FixedFree ValuationNo application fee
Horizon 260 Drawdown Fee Free6.55%FixedFree ValuationNo application fee

The equity release rates have been sourced from Equity Release Supermarket. These indicative rates and incentives may have changed since this article was last updated. Therefore, they should only be taken as a guide and we cannot guarantee their current accuracy. Please also note that we do not provide advice on or endorse any particular product listed here. The rate you are offered will depend on your individual circumstances and subject to lender approval. We recommend that you speak to an equity release advisor to see what the best options are for you.

If you take out a product with Age Partnership, we will receive a fee for introducing you to them. By contacting Age Partnership through us, the cost of any equity release product would be the same as if you had contacted them directly.  The fee we received is used to help keep our site operational and to produce new content.  

The Process of Releasing Equity

The first step in releasing equity from your property is to consult a professional. An experienced advisor can describe the various equity release plans offered, their costs, and any potential effects on your financial situation. 

To assist you in estimating how much equity you can release, they can also give you access to an equity release calculator.

The equity-release product you select next must meet your needs. This could be a lifetime mortgage or a home reversion plan, depending on your situation. 

The equity release provider will evaluate the value of your property once you’ve decided on a product and make an offer based on that evaluation. A lawyer will walk you through the legal ramifications of the equity release agreement if you accept the offer.

Benefits of Equity Release

Equity release has many advantages. It can supplement your retirement with regular income or a tax-free lump sum. Without selling or moving, you can use it to unlock the value locked up in your house. 

Most importantly, you are protected from owing more than the value of your home, thanks to a no-negative equity guarantee.

Lifetime mortgages also offer flexibility because you can decide whether to make monthly payments or allow the interest to accumulate.

Potential Risks and Downsides

The downsides and potential risks of equity release are similar to any financial product’s. These fees may apply if you repay the loan earlier than anticipated. 

Your tax situation and eligibility for means-tested state benefits may be impacted by releasing equity. It’s also important to remember that taking equity out of your house can lower the value of your estate and affect the bequests you can make to your loved ones.

Legal Framework for Equity Release

In the UK, the market for equity release is governed by the Financial Conduct Authority. As a result, homeowners are protected and have access to the Financial Ombudsman Service in case of a problem. 

Equity release plans must also abide by the standards and guidelines established by the Equity Release Council, which include the assurance of no negative equity and the right to live in your home for the rest of your days.

Seeking Professional Advice in Croydon

Getting legal counsel is essential before signing an equity release agreement. A financial advisor can offer knowledgeable advice on equity release, ensuring you comprehend the ramifications and risks. 

Getting impartial legal counsel is also advisable. Legal counsel from a solicitor will safeguard your interests as you navigate the agreement’s legal requirements. Numerous trustworthy lawyers and financial advisors in Croydon specialise in equity release.

Financial Implications of Equity Release

While equity release can give you a lump sum or recurring payments to supplement your income, it’s crucial to understand any potential financial repercussions. A lifetime mortgage is a loan secured by the equity in your house. 

Although you continue to own your home and are not required to make regular payments, the interest on the loan can accumulate and significantly increase the balance owed. Your tax position could be impacted by releasing equity. 

Although the money you get from an equity release is tax-free, other tax aspects may be affected. You may be required to pay income tax if you invest the money and receive interest.

You can get professional guidance on tax issues from a financial adviser or debt service.

The release of equity could have an impact on means-tested state benefits as well. Your ability to receive some help could be affected if you receive benefits and your cash savings rise due to releasing equity. 

You can learn more about how equity release might affect your benefits by seeking professional advice from financial advisers or companies like StepChange Financial Solutions.

Protecting Your Interests with Equity Release

Protecting your interests is crucial when thinking about equity release. Ensuring your equity release plan has no negative equity guarantee is one way to go about it. This guarantees you will never owe more on your home than its value, even if housing prices decline. 

Making monthly payments can also aid in keeping a lifetime mortgage’s cost under control. Even though you are not required to make payments, doing so can stop the interest from accruing and escalating the loan balance. 

Before finalising an equity release agreement, it is essential to obtain independent legal advice. A lawyer can examine the deal, clarify the terms, and safeguard your interests.

Equity Release and Home Ownership

Home reversion plans and other equity release programmes work differently regarding home ownership. You continue to be the legal owner of your home with a lifetime mortgage.

Even after subtracting the loan and interest, you can still profit from any increase in property value. 

You sell all or a portion of your home to the equity release provider using a home reversion plan. Even though you can continue to live there for free, you won’t get the full benefit of any appreciation in value. 

Considering how these plans affect home ownership and what they mean for your estate and loved ones is crucial. Clearing these up with professional guidance will enable you to make an educated choice.

Choosing The Right Equity Release Provider

It’s crucial to pick the best equity release provider. Equity release plans, interest rates, and terms and conditions vary between providers. 

Some may provide more accommodating schedules, enabling you to relocate your project to a different location or make voluntary repayments. The price of equity release varies between providers as well. 

While some may have higher advice fees, others may have more affordable legal costs. When contrasting providers, it’s critical to take these costs into account.

The Equity Release Council maintains a list of authorised service providers who adhere to their standards and values. To compare service providers and find the best plan for your needs, consult a mortgage adviser specialising in equity release.

About Croydon 

South London’s thriving and bustling town of Croydon is well-known for its extensive history and multicultural population. It is situated in the Croydon Borough of London, one of the most populous boroughs in the city. 

Croydon is a Surrey county located about 10 miles from the heart of London. Like other parts of Greater London, Croydon has a 020 telephone area code. 

The primary postcode regions are CR0, which includes most of Croydon, CR2, Thornton Heath, and Purley, respectively, and CR7, which provides for South Croydon.

A day of music, dance, and food celebrating Asian culture is known as the Croydon Mela, and the Croydonites Festival of New Theatre is held there annually. 

The BRIT School, a prestigious performing arts and technology institution with alums that include well-known international performers like Amy Winehouse and Adele, is also located in the town.

The Whitgift Shopping Centre, one of London’s most extensive shopping and entertainment complexes, is located in the centre of the community and is home to various stores, eateries, and a Vue theatre. 

The renowned Fairfield Hall, which presents theatrical productions, concerts, and exhibitions, is also located in Croydon.

East Croydon station offers quick and frequent connections to Central London, the South Coast and Gatwick Airport as part of Croydon’s extensive transport system.

The only tram system in London is in Croydon, which offers vital connections to the city’s surrounding areas.

Local Areas Where Equity Release Can Be Provided

Here is a list of local areas and boroughs where equity release services can be provided:

1) Addiscombe

2) Broad Green

3) Coulsdon

4) Crystal Palace

5) Forestdale

6) Kenley

7) New Addington

8) Norbury

9) Purley

10) Sanderstead

11) Selhurst

12) Selsdon

13) Shirley

14) South Croydon

15) South Norwood

16) Thornton Heath

17) Upper Norwood

18) Waddon

19) Woodside

20) Beddington

21) Carshalton

22) Chessington

23) Epsom

24) Ewell

25) Kingston Upon Thames

26) Merton

27) Mitcham

28) Morden

29) Sutton

30) Tadworth

31) Worcester Park

32) Banstead

33) Leatherhead

34) Surbiton

35) Teddington

36) Twickenham

37) Weybridge

38) Wimbledon

39) Brixton

40) Clapham.

Try Age Partnership’s equity release calculator and estimate how much money you could release from your property

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Meet the author

Jane Parkinson

Jane Parkinson

Jane is one of our primary content writers and specialises in elder care. She has a degree in English language and literature from Manchester University and has been writing and reviewing products for a number of years.

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Most advisors charge for their service.  But you can get fee-free equity release advice from Boon Brokers. 

Call : 0333 567 1812

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If you take out a product from Boon Brokers, we will receive a fee for introducing you to them.

Unlike most equity release advisors, Boon Brokers do not charge any fees! Have a free consultation to see how they can help.

You can speak to Boon Brokers on the number below and discuss your options.

0333 567 1812

Use the equity release calculator and see how much money you could receive.

You can book a callback from an equity release specialist, who can call you when it's conveniant.

All equity release advice is provided by Boon Brokers Limited, which is authorised and regulated by the Financial Conduct Authority (FCA). The Financial Services Register number is 973757. 

 

If you take out a product with Boon Brokers, we will receive a fee for introducing you to them. Boon Brokers provides advice for free and without obligation.  By contacting Boon Brokers through us, the cost of any equity release product would be the same as if you had contacted them directly.  

The fee we receive is used to help keep this site operational and to produce new content.  

 

Think carefully before securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage.

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