Should I Consider Equity Release?
I could do with more money in retirement
but I wouldn't,and I would
consider equity release
- Equity release allows you to take out some of the money invested in your property especially if you have reduced pensions or there is no need to provide inheritance provisions for family
- Tax-free lump sum or smaller regular payments to supplement your income, and can continue to live in your home until you die or move.
- You can move to another property in the future, and transfer the equity release scheme. It will be subject to your new home meeting the property suitability criteria applicable at the time.
- With a lifetime mortgage, you continue to live in and keep ownership of your home.
- You can choose to either continue to pay the interest each month to avoid the mortgage increasing or simply allow the interest to be continually added to the amount borrowed. You can possibly sell some or all of your home ownership to provide a lump sum of money without needing to pay any rent.
- You may continue to benefit from any rise in the value of your property.
- Any money released is tax free
- In some instances a no negative equity guarantee offered by the Equity Release Council approved schemes means you can be assured that any debt you create, plus any ongoing interest which you add to the mortgage will never become more than the property’s future value when you die.
- Equity release schemes means borrowing against your property. This reduces the amount of your personal asset in the property and could mean less money for your children to inherit.
- Equity release potentially could affect your state benefits.
- With certain plans, the equity release company owns all or a part-share of your property.
- Should you wish to end the plan it may be difficult and you may incur penalties to do so.
- If you have care at home funded fully or partially by the local council, they may start charging you or ask you to pay more.
There are alternatives you might want to consider, such as:
- Downsizing to release equity
- Selling your property and renting
- Letting part of your property to provide an income
- Amending your lifestyle and finances
Equity Release is ideal for some people and not for others. It’s is not a decision to be rushed into and time needs to be taken with a sympathetic professional who not only engages yourselves but also considers the wider family. Making sure you get the best possible deal with the lowest charges is what most people are looking for. Using a whole of market provider who puts your interests first is paramount.
The consequences can be extreme, so this shouldn’t be considered lightly.
It is really important to make sure that you’ve involved the people who matter to you.
You can either go back to EquityDrive by clicking here or on the first button below, look for further information by following the links at the bottom of the page, or look at another Drive.
You’ve seen more detail on the different points of view, and also what YouDrive’s view is. You can go back to EquityDrive by clicking the button here.
Money Advice Service information on equity release
The Equity Release Council is a trade body which represents the sector and promotes standards for its members
AgeUK has a section on equity release
The Equity Release Supermarket offer a full service
The Personal Finance Society have a factsheet on equity release
Legal and General have a guide on lifetime mortgages – download it here