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How to correctly use equity release to get a TAX-FREE value of your home so it doesn’t cost you a fortune.
If you’re considering equity release you MUST BE AWARE of it’s pros and cons.
The last thing you want to do is release cash only to find out that you’ve done it incorrectly and you’re locked into something you WISH you hadn’t done.
Therefore the question often raised is the following: is equity release a good idea? Equity release is a fantastic product, but unfortunately people don’t fully understand it. This means that they get duped into something that’s not right for them.
However, when used correctly it’s incredibly powerful.
There’s a reason that every 12 minutes somebody in the UK, over 55 is unlocking tax-free cash from their home.
Do you want to be the person who goes in blindly only to make a big mistake?
Do you want to understand how does equity release work, so that when you chat with an advisor you’ll know if they’re ‘selling’ you or are actually giving you good advice?
If this sounds like you, then make sure you download our FREE guide.
This guide took hundreds of hours of research and years of experience to put together.
I hope you enjoy it & find it valuable.
Are You Considering Equity Release?
If you’re thinking of what is equity release and considering taking it make sure you download this guide to find out:
- What’s Equity Release?
- What are the Costs?
- What are the Pitfalls?
- What are the Plan Types?
- What are the Alternatives?
- Questions You Should Ask!
Is Equity Release right for you?
An equity release is where you choose how much extra income you wish to raise for your retirement by unlocking value from your property.
If you are retired or a home-owner over 55 and bought your home a number of years ago and are looking for a lump sum, regular smaller amounts or a regular income this could be the perfect option for you.
Popular reasons why people release cash:
- Going on that dream holiday you’ve always wanted.
- Paying off loans or credit debts.
- Gifting some money to family members.
- To pay off an existing mortgage.
- Add to your pension savings.
- Buying that dream car.
- Making home & garden improvements.
It can be a great idea to take out an equity release mortgage:
- It offers you financial freedom
- Allows you to retain ownership of your home
- Doesn’t require you to make any monthly repayments
- Allows you to spend the cash as you’d want
However, there certain drawbacks to taking the plan – you miss out on the increasing estate values, and it affects your entitlement to means-tested benefits. So, before you consider taking the scheme, you should weigh the pros and cons, and figure out if it’s your best option.
In as much as equity release plans offer you several benefits (like financial freedom), they have numerous drawbacks. Some of these include:
- You’ll leave behind a reduced inheritance
- There’s ‘rolled up’ interest on the lifetime mortgage plan
- There are limits to the amount you can release
- It may affect your state-entitled benefits
- You’ll miss out on increasing estate values
Typically, this depends on your plan provider. If, however, the estate prices do recover, you’re more likely to have assets to pass on. It’s best to chat with an expert as each plan differs.
Upon death, your equity release plan is repaid. If you took the mortgage with your spouse, though, the abode is usually sold when the last surviving proprietor dies.
Your beneficiaries must inform the plan provider about your passing and with a lifetime mortgage, they usually have twelve months after your death, in which to repay the plan.
Once the plan provider puts up your home for sale, they will take the loan amount, plus the interest accrued over the years. The remaining proceeds will go to your beneficiaries, according to what’s stipulated in the Will.
Well, the current rates for lifetime mortgages are 5%. Nonetheless, you can also get some rates at under 3%.
In the current financial market, many high street banks like Santander, NatWest, Barclays, TSB, among others, don’t offer equity release products.
However, there are companies like Nationwide, L&G, Aviva, Hodge Lifetime, and More2Life that offer you a diverse range of equity release options and competitive offers.
All summed up in the ultimate guide to save you time & help you make an informed decision.
How Much Can You Release?
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SovereignBoss.co.uk is a marketplace connecting people with equity release companies. Accordingly, SovereignBoss.co.uk does not provide quotes or sell products directly to consumers and is not a licensed agent or broker.