Author Archives: admin
Buying a home and getting on the property ladder is one of the biggest goals that many in the UK have. It’s not just something that’s limited to the UK, either — you might find that your neighbors across the pond in Canada as well as the US will definitely share your dream of owning a home. No matter where you live, it can feel like it’s downright impossible to buy your first home. Property values on the rise again, and tough credit conditions make it hard for “regular people” to find themselves in their first home. However, does that mean that we all just stop trying to make life better for ourselves? Not at all. You will definitely want to make sure that you focus on getting the loan that you need to get the home no matter what. It’s going to be the key to long term investing in your life.
Yes, renting is something that a lot of people do for a very long time, and you will probably need some time to work up a deposit. But what if you already have a deposit and you still don’t have enough to really get the home that you want?
There might be some help with you after all. The government has done a scheme where you can buy a home using an equity loan.
There are some restrictions that you need to make sure that you can follow below you apply for the program.
As mentioned earlier, these equity loans are only for certain newly built homes on specified housing developments in England. They are provided through HomeBuy agents — they hold the right to decide if you can buy a home this way. These housing associations can run schemes for people who have a tough time buying a home.
There is an income restriction — your household has to earn 60,000 GBP or less. In addition, you will have to prove that you cannot afford to buy a home in your area any other way. This is so that people that need help the most will be able to get their needs met.
These loans are going to be open mostly towards first-time buyers as well as anyone that rents a council or housing association property.
The basic scheme here is that you buy the home with 70% of the cost met by your mortgage and the savings that you’ve built up over time. The other 30 per cent is handled by the govenrment and the house builder through an equity loan.
Now, it’s important to understand the finer print here. The loan is called an equity loan for a reason — the value is going to change based on how much your home is worth. The amount you owe is going to rise and fall with the value of your home. The title will still be in your home, which means that you can sell your home at any time.
What happens when the home is sold? That’s a good question — the 30% that’s held by the government is going to be taken out of the proceeds of the house sale.
If you decide to keep the home, you will need to pay back the equity loan after 25 years.
There are indeed some fees involved with this scheme. There are no fees assessed for five years — this gives you time to save up for them. The 6th year that you have the loan you will be charged a fee of 1.75% of the loan’s value. Every year after this, the fee is going to go up. The amount of increase is calculated using the Retail Price Index plus 1 percent. You can find the RPI index in most newspapers, within the finance section.
Keep in mind that these fees are on top of your equity loan payments. You can pay them to the National HomeBuy agent, and they will contact you before the fees begin to set up monthly payments with your bank.
If you want to pay the equity loan back early, this would definitely be a good thing. It’s known as staircasing, and many homeowners use it when they realize that they can pay a little extra and have the interest costs kept to a minimum.
You still have to talk to the National HomeBuy agent and figure out if there are nay additional costs for this.
Overall, we think that this govenrment scheme for first-time buyers and those with a low to moderate income is a good fit. Everyone should feel like they have the chance to own a home, and this scheme could be just what you’re looking for! Check it out for yourself today — you’ll truly be glad that you did!
Trying to make your retirement a little sweeter is the subject of a lot of guides, and for good reason. If you’ve worked hard all of your life the last thing that you honestly want to do is find that you really can’t provide for yourself after working so hard for so many years. There is something to be said about going beyond just living — you want to thrive and you want to be able to have a good time. It’s going to be up to you to look through any and all resources that you can use for this purpose. We really like equity release schemes, but we find that people really don’t know as much about these schemes as they would like to believe.
So this guide covers much of the high points of these schemes.
One of the first things that you need to know is that all equity release plans are going to reduce the overall value of your estate. So your surviving heirs will not receive as much for an inheritance as they might have — but if you already let your family members know upfront what you’re doing, they can actually plan ahead and still take care of themselves. These are pretty serious decisions that you should honestly make as a family rather than just assuming you must keep it a secret.
If you are entitled to state benefits, you will need to make sure that the equity release doesn’t affect this at all. This is something that you’re going to be doing for a lifetime, which means that there are some penalties for paying the loan back in full.
If you move into a long term care facility, you will have to repay the loan at this time. It can be done through the sale of your home, but it’s up to you.
The good part of equity release schemes is that you really don’t have to leave your home if that’s not what you want to honestly do. It can be better to stay in the home that you bought all of those years ago and tap into the equity than to have to move around. You get to keep your home, and there are no monthly repayments to meet.
Make sure that you go with plans that are SHIP approved — this stands for Safe Home income Plans. This guarantees that you don’t fall into negative equity and you can move home if you wish. If you want to stay in your home for life, you can do this as well.
The two top types of equity release out there are lifetime mortgages and home reversion plans.
The lifetime mortgage is definitely the most popular, because it allows you to receive a tax-free cash lump sum, and there’s no monthly payment schedule to have to deal with. You get to truly stay in your home for life — this is not a gimmick of any kind.
If you want to move and take the plan with you, you can generally do this. You may even be able to protect a percentage of your property and guarantee an inheritance.
Home reversion plans are a little more complicated, as they let you sell all or a part of your home to another company in exchange for a cash lump sum of income. You can still stay in your home for life, but the plan comes to an end when the company takes its percentage share of the property. This is usually when you pass away, but it can also be when you move into long term care.
What if your circumstances change? This is something that’s definitely on everyone’s minds. If you actually do need to switch plans because something has come up, you can definitely do this as well.
A qualified adviser can go over your unique situation and give you what you really need to know in greater detail than any guide can. Keep in mind that you will need to be at least 55 years old in order to enjoy any equity release scheme. Your home also needs to be 50,000 GBP or more.
Many people worry that if they take some of the collateral out of their home, then it means that they will eventually lose their house. There have been scare stories in the past, when this has happened, but these days it is not often the case. There have been tales where people have been forced to leave their homes as they have to be sold to pay back the loan. Normally this does not happen because the terms are normally that the house will only be sold when the person has finished with it, which normally means that they have passed away.
The key thing with this sort of scheme, is to make sure that you fully understand the terms and conditions. You need to be completely aware of what you are getting yourself in to and what will happen in the future as well.
What normally happens is that you will be given a lump sum of money or a regular monthly income. This value will be taken away from your property. When you no longer need the property, it will be sold and the company will get the money.
This can be a worry for some people, because they want to be able to feel that they can pass the property on to their children. In some cases the property will be sold and not all of the value will be taken by the lender but whatever is left over will go to the estate of the deceased.
It is important therefore, to make sure that a sensible choice is made when choosing an equity release scheme. It is worth thinking hard about why you need the money and how much you need, to ensure that you are making the right decision. You also want to make sure that it really is the right thing to do. Think about whether it will improve the quality of your life and what a difference the money will make to you and what a difference reducing your estate when you pass away will do. It can be a very difficult decision. It should not be something that you rush in to, so it can be worth investigating before you have a need to do it.
Then, if you are suddenly desperate for money in the future, you will not have to spend so much time doing research and you are less likely to make an error when making your decision.
When equity release first came about, there was a lot of talk of it being a con. Many people felt that they were not treated well when they tried to get money from their property and they were worried that they may not be able to continue living there after a certain period of time. Sadly this gave the whole scheme a bad reputation.
Things have changed now and equity release schemes are regulated. This means that everything is overlooked and so should be fairer. However, there are still better schemes than others and so you need to be responsible and make sure that you choose the right one for you.
You need to think about what you want and how much money you need, then look at what is available. Look at how the different lenders work and then when you have found a few that you think will suit you, make sure that you read the terms and conditions very carefully, so that you know exactly what you will need to expect.
You will find that they will differ in how much they lend, how they charge for the loan and things like that. It is therefore important to look carefully at a broad range of options, so that you know what is the best option for you. You should find that the options are safe, but it really depends on how you define safe. You need to think about what you want from the scheme and which fits in with this. You will have to be prepared to make some sacrifices to get the money, in the same way that people always do when they get a loan and so you will need to decide whether you feel it is worth it.
It is also worth carefully choosing the company that you use as this will allow you to feel safer. If you use someone with a good reputation or that you have heard of, then you will feel better about using them, than if it is a company that you have not heard of and therefore have little trust in. Many companies do now have their own equity release schemes and so there is a high chance that you will find one who you have heard of or already trust. However, it is still wise to do some research in to the company and their equity release schemes to make sure that you are fully happy with them.