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FAQs

  • What is equity?

The equity of your property is simply its market value less the total amount of all loans secured on your property.

Example: Market value of property £250,000

Mortgage outstanding £180,000

Improvement loan outstanding £20,000

Equity = £250,000 – (£180,000 + £20,000) = £50,000

  • Will my property be at risk of repossession or will I be forced to sell my property?

You only have to repay equitable charge on your property when you choose to sell your property or die. Other circumstances in which LRS has the right to recover the costs of the works include: if you leave the property empty, allow it to fall into serious disrepair, attempt to create a mortgage of the property or you are declared bankrupt.

  • How much does it cost?

The total cost of depends on the works done but there is no commitment to pay anything until a survey has been carried out. The total cost is agreed before works begin so there are no unwelcome surprises.

  • How much do I have to repay?

The equitable charge is calculated as set below

Example: Property value after improvements £300,000

Cost of improvements £30,000

Percentage equity = 30, 000 = 10%

Amount to be repaid when the property is sold will be 10% of the proceeds from the sale. So, assuming you sell your property for £300,000, LRS will receive 10% of the proceeds of the sale i.e. £30,000. If the market value you achieve on a sale is more than £300,000 it will be 10% of the larger figure. If it is less than £300,000, LRS is always entitled to deduct the cost of the works.

  • Can I change my mind?

Until you sign a contract with us, you can change your mind at any time. We ask for your consent before we instruct a valuer and surveyor. We only go ahead to the next stage of the process when you’re ready, so you have all the time you need to consult independent advisors and make sure you feel really comfortable with the scheme.

If you change your mind and decide to withdraw after that stage has been carried out, you will have to pay the costs of the surveyor and valuer and any administration costs.

If you do decide to go ahead with the scheme then we will draw up a contract. Once a contract is signed for the works to be done you cannot change your mind.

  • Can I have my own builder?

Yes, provided they meet LRS requirements and standards.

  • Can I repay early?

If your circumstances change you can repay all or part of the cost to LRS at any time, with no early repayment penalty.

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