Equity Release, who is it for?


There are two main types of equity release product available, Lifetime Mortgages and Home Reversion Plans. Both products are very similar in many ways but are also very different when it comes to ownership of the home.

A lifetime mortgage allows the homeowner to continue owning the home. However, with a Home reversion scheme the owner sells ownership to the Home Reversion Company but both schemes allow the applicant to retain the right to stay in the home as long as they wish.

Both schemes also allow the over 55’s to release money that is tied up in their home to spend however they like without having to make monthly payments to repay the loan. Beware of the interest roll up though, as this can increase the size of the loan significantly as each year passes.

Demand for equity release is rising fast with over £1 billion raised in 2013 by the over 55’s. Why? Well the most common reasons for releasing money tied up in people’s homes this way fall into one of two categories.

Firstly, they need to release money, because they have debts they can no longer afford to service or they have to pay off their mortgage or even because their retirement income has fallen well below their expectations and they just cannot afford to live without getting into more credit card or personal loan debt.

The second category is that they want to release the cash for things like home improvements, holidays, cars or even a gift to a family member. One of the fastest growing uses of equity release is to provide children with a deposit to buy their own home.

Equity release should not be entered into lightly though and anyone considering this should always explore all of their options first, even consider selling the home and downsizing to release funds. Only when all of the options have been considered and excluded, should equity release be chosen. Even then it should always be discussed with family and those who may be expecting some inheritance in the future.

Advice should also always be taken from a suitably qualified Equity Release Adviser and a Solicitor.

If you would like to know more about equity release, please contact Lee Tabreham at CDG Financial Services Limited on 0115 977 1155 or email  leet@cdgfs.co.uk

Annuities – what are they and why do I need to know?


It’s a fact that people are living longer and may well need their income to last for 25-30 years in retirement. The majority of the population would like to have a known income in retirement so that they can budget accordingly.  In my experience clients also like the certainty that this money will continue to be paid for their lifetime, maybe even after their death to a spouse.  One of the best products for someone reaching retirement who would like the certainty is an Annuity.

An Annuity is a product that uses the money in your pension fund to provide you with a tax free lump sum of up to 25% of your accrued pot. The remainder of the fund  is used to buy an income for life. This may be taxable dependent on an  individual’s circumstances. Why do I need to know this, I hear you cry? Well, there are a lot of options that you can choose for the remainder of the fund and it is important that you seek Independent Financial Advice.  By talking to a professional, you can make sure your money gives you the highest level of income for your needs; do you want a single or joint life? Do you want to build in any guarantees or percentage increases? How often do you want the income to be paid?

By just keeping with your existing pension provider you could be potentially losing out on an increased income in retirement and settling for a product that does not suit your needs!

I helped a client recently who had a Personal Pension. She came to me to ask if I could better the amount of income in retirement her pension provider had offered. By talking through what was important to her and finding out what other income she was receiving I managed to get her an increase in her income just by tailoring the annuity to her needs and looking at alternative companies.

You can also potentially make your income higher by declaring your health, lifestyle details and postcode! Why would this matter I hear you say? Well more and more people are benefiting from choosing an Enhanced or Impaired Life Annuity. This is when the Annuity provider  looks at your medical history, where you live and even the type of job you used to do .This can result in you being offered a higher income if you meet their criteria.

There are so many options to choose from and once the decision has been made you cannot change it. This is why you should take the time and talk to an Independent Financial Adviser.  We can advise you to make sure that the type of Annuity you choose is right for your circumstances and takes in to account any other income you may receive.

If you would like to discuss your options please do give me a call on 0115 977 1155 or email katherine@cdgfs.co.uk


Help to Buy Scheme


The UK mortgage and housing markets have seen a lack mortgages being available since 2008 preventing many from buying their own homes or moving up the housing ladder. One of the difficulties to purchasing a property is saving up a deposit or building up equity in an existing home.

The Government have launched a number of initiatives to help people to buy their own homes. The Government’s Help to Buy scheme has been designed to help borrowers who wish to purchase a property and only have a small deposit. The scheme falls into two parts: an ‘equity loan’ and a type of insurance for mortgage lenders to help them offer more mortgages to people with small deposits.

A number of high-street lenders are not offering loans for new-build properties through the mortgage guarantee part of Help to Buy, highlighting the increasingly complex relationship between the two halves of the government scheme and raising questions about its impact on the UK residential property market.

Both parts of the scheme encourage first-time buyers to join the market by allowing them to obtain mortgages for properties worth up to £600,000 with a deposit of only 5 per cent.

The first, shared-equity part of Help to Buy is where the government provides an interest-free loan worth 20 per cent of the property that the borrower starts to pay back after five years, this is limited to new-builds. It began in April last year. The second part of the scheme officially began this month and involves the government guaranteeing 15 per cent of the loan value if the borrower defaults. The lender pays a fee for this “insurance”.

If you would like further details on this scheme please contact me on 0115 977 1155 or email me at julia@cdgfs.co.uk.

Julia Hoyes Independent Mortgage Broker CDG Financial Services Ltd

Your home may be repossessed if you do not keep up payments on your mortgage. There will be a fee for arranging a mortgage from £395 to £795 dependant upon your individual circumstances.