Interested in Equity Release? Read this first

by Jody North on December 6, 2011

Equity release is known as a means of unlocking value of a house, and not having to move house. It’s used mainly by more mature property owners who either have paid back their mortgage altogether, or have a little bit left to pay. All equity release schemes are intended to be long-term arrangements and so are therefore not to be entered into lightly. Once you have opted in for them it can be difficult, pricey and even unfeasible to get out of if your situation change.

Some of the choices will require that you hand over ownership of your home either entirely or in part; others that a mortgage is put on the property. After a period of saving to pay off the mortgage this may be a hard move to make. In the event you opt to take this route, it will be essential for the peace of mind to comprehend fully what this will mean with regards to your rights and protection of period – quite simply, your right to stay in your property for your life span.

These will likely be set out in your fine print of the lender’s offer to you. If you are not pleased to agree to them, equity release may not be for you. If you want to go on and take advantage of the value of your home to produce extra cash or capital, then it’s essential to remember this will inevitably have an impact on any monetary gift you may want to leave to your family.

Most of the schemes for equity release work either by marketing a portion of your property, or by taking out a home loan in which the interest is retracted until passing away. Understand that either of these methods will lead to a loss of assets to pass on after your death. It is for this reason you may possibly think about speaking about the options with the family – it may be that they’ll aid in some way.

Equity release isn’t suitable for everybody and you must always seek advice from an independent legal financial expert before taking out a plan. Obtaining the right advice from experts in this area is essential. They will make clear the lawful factors included and help you understand the terms and conditions of any agreement.

Because these are long-term arrangements, you need to be especially careful to take into account what can happen in the future. Your needs may alter as you get older and it’s crucial that you have thought about how any plan of action taken now may affect your future options.

Want to find out more about equity release, then visit this website on how to choose the best equity release schemes for your needs.

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