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Is Equity Release A Good Idea?

There are so many benefits to property equity release—one of them being to fund or boost a sustainable, luxurious retirement. We've put together a list of advantages just for you.

    3 Reasons Equity Release Might Be The Good Thing

    Property prices have skyrocketed and being a homeowner gives you excellent financing options.

    Think about it:

    You can now unlock any equity or money that's tied up in your home or property, but you don't have to sell it or downsize to a smaller, cheaper house.

    Astoundingly, roughly every 12 minutes, someone takes out an equity release plan in the UK.

    Get That Deserved Retirement

    Life expectancy has strengthened. People are more focused on healthy living, and life expectancy has risen to 81 years. It used to be 74.

    Let me tell you this...

    Retirement is very exciting for most people, but it's also potentially one of the most challenging chapters of a person's life with finances.

    Simply:

    Releasing the equity hidden in your property's value gives you a tax-free cash flow to boost your pension. Some people even startup a small business or help a family with monetary gifts.

    Thus bringing up the question, is equity release a good idea?

    3 Equity Release Benefits

    Equity release plans have strongly emerged as a popular way to release the money tied up in your home. You can get the equity yet maintain ownership of your property.

    There two very flexible ways to do so:

    You can choose a lifetime mortgage, which works by taking a secured property-based loan.

    You can also choose a home reversion plan which works by selling a portion of your property to an equity release company.

    The Best Part:

    There are many benefits in taking out an equity release, making it an ideal plan for you if you're older than 55, require some cash, and own your home.

    These benefits include:

    1. You can still live in your house

    The American Psychological Association (APA2) researched that selling your home and shifting houses can be emotionally and physically daunting. Therefore, it's great that you don't have to go through the ordeal of packing up and moving to an unfamiliar place with equity release.

    That's just half the story.

    Moving also costs money: there are solicitors' charges and stamp duty fees. Also, there's the emotional price of packing up and relocating from a home where you've spent the majority of your life building your legacy.

    By releasing equity, you can maintain your independence and keep living in your family home until you pass away or need permanent care.

    That being said:

    You're allowed to move to another house if it's an acceptable house according to your plan provider. Just a side note: if you have heirs, they'll most likely receive a smaller inheritance after equity release.

    2. You get to live life luxuriously

    Equity release plans allow you the freedom to do whatever you want with your money, unlike other financial programs or products that tell you how to spend your money.

    You'll still get the right to live in your house for life or until you need permanent care. You can move to a new home if you want to move to a new home if it's of equal value and meets your provider's requirements.

    3. Protect your inheritance & your heirs

    Equity release has put some safeguards in place to protect your inheritance and family's financial wellbeing. The no-negative-equity guarantee makes sure that your equity release plan follows the Safe Home Income Plan (SHIP) rules.

    So, here's the deal:

    When you're considering equity release, you need to think about interest rates and their effect on your loan amount. Unlike a standard mortgage loan, the interest period of an equity release mortgage loan is open-ended.

    How Much Money Can I Borrow With Equity Release?

    Technically, you're eligible to borrow up to 60% of your property's value, depending on which provider you have. The amount you can borrow typically increases with your age. Some providers might offer a more significant amount of money to you if you have standing medical conditions.

    Is Equity Release Good or Bad?

    We have underlined all the ins and outs of an equity release scheme, its pros and cons and how it works. It's a fantastic way to get some extra funds flowing into your bank account, with many benefits that come along with it!

    In Conclusion

    It's much safer than it was in the past. So you don't have to worry about anything!

    Contact your financial adviser today and march into financial bliss!


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