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Alternatives to Equity Release

 

    What are the Equity Release Options? 

    Even though there are thousands of people using equity release to fund things such as improvements in their homes and to repay debt- it’s not a preference for all.

    Financial freedom may be a desire for everyone, but you must weigh all your options before you pick equity release as your means to raise money.

    Below are the ten best alternatives to equity release:

    #1. Selling Your Assets

    Many people usually have their homes as the most significant asset. But perhaps you have other assets or belongings that you might rid of or release equity under to gather the funds you need.

    This option is not a suggestion to sell priceless family heritages, though there may be other assets you’d barely notice if they went.

    #2. Re-mortgage

    Consider contacting your lender and find out how flexible they are with extending the current mortgage agreement that you have.

    The other option is a Retirement Interest-Only mortgage which can run for the rest of your life. And it only requires you will only pay monthly interest to keep what you owe level. Your estate repays the mortgage like an equity release.

    #3. Your Family and Friends

    Whilst people rarely think of asking family or friends to help; you must also explore the possibility of getting financial help from them. They might be glad to help, more so if they are sole beneficiaries to your estate.

    #4. Getting Grants

    When you want to make renovations due to health-related reasons, sometimes the local authorities might grant you some funds. Look into this.

    Some Home Improvement Agencies and local councils help with the costs regarding urgent home alterations.

    #5. Move Into an Affordable Home

    You can consider moving to a less expensive property as a classic ‘downsize’, which can serve as the first option without taking an equity release.

    Downsizing may come with other costs, including agent fees and moving costs, or Stamp Duty Land Tax. Equity Release is still a sensible option to consider as you look to buy a new home too. The top-up provided by the lifetime mortgage can be a cost-effective means of borrowing.

    #6. Consider Your State Benefits

    It would be best if you looked into all the entitlements you have to state benefits before considering an equity release plan. They are a significant source of funds to boost your income.

    #7. Renting Out a Room

    Sometimes renting out a room in your house is a profitable way to provide you with extra income.

    You can still get equity release even if you have tenants.

    This option serves to lower excessive borrowing and provide you with a lump-sum at once and additional money every month.

    #8. Working with a Budget

    You must consider adjusting your budget to promote successful financial goals. Being able to raise your income may be useful to gain extra monthly payments, but reducing your expenditure plays a massive role in maintaining financial security. This method may include cutting out luxury spending and unnecessary expenses.

    #9. Employment

    Have you thought about going back to work? This alternative option may be an excellent way of getting more disposable cash each month. Perhaps you are yet to retire; you can get a higher paying job elsewhere or look to earn more with your current employer. If you are not in employment, then perhaps you must consider taking a part-time job.

    #10. Not Taking Action

    Perhaps one of your most vital considerations should be the consequences of not taking any financial action like an equity release and weigh the most excellent utility. Your estate is likely to benefit in the long-run.

    What's Important about Equity Release Alternatives?

    Not everyone will find equity release suitable for them and in case that’s you, you must be able to examine all your plausible alternatives essentially.

    When you find yourself some viable alternatives, review them powerfully; they might provide you with all the funds you need.

    You should also find out and weigh how much money an equity release will provide you. It would be best if you use an online equity release calculator to find out the maximum that you may release.

    Renting out a Room

    Is there plenty of space in your home? These are questions you must ask yourself as you think of renting out a room for more income. However, it would be best if you address these questions with caution because you will have particular responsibilities to fulfil.

    It would profit you if you were up to speed with what to expect before letting someone into your home. How you accommodate your tenant will affect the tenancy they have. Primarily, you will look at concerns about their rights and how to end the occupancy.

    Downsizing

    If all your children have moved out and you have much more space than need, then downsizing can be a viable alternative. It’s a profitable means of freeing up extra money.

    Also, your home may feel too big, or perhaps it’s an old property that will need too much maintenance, and the property becomes very costly for you to run. Then You may want to move elsewhere.

    Whereas shifting homes may work fine for some people, few homeowners can fund themselves solely by downsizing after retirement. You need to take into consideration the many costs and emotional effects that come with down-sizing.

    Budgeting

    Retirement can make it challenging to live within your means, but you must assess how your finances flow and look for any expenses that you can cut back and save some money. Review all your bills.

    Use Other Assets

    Most people like to keep many assets for future investments. If you have made investments in other assets, you can utilise the funds generated through these to cushion your income in retirement. This option remains a very low-cost alternative that’s quick to arrange and implement, and it will put less stress on how tight you have to budget for your finances.

    You must check if you have any deferred or outstanding pension arrangements. Under the pension freedom regulations, you can now become eligible to access pension funds from the age of 55, and this can help you appropriately address any immediate problems that may arise.