Vital Information Regarding Equity Release

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We know that we need to be prepared in order to be successful at anything and this includes trying to provide a secure financial future for when we are old and retired. This is why it is important to gather as much information as you can about equity release schemes UK companies are offering. It is best to obtain all the details before you decide to make a purchase.The original sourceĀ navigate here.

Equity Release Pros

Provides tax free cash or income – equity release helps support you financially throughout retirement enabling you to spend the proceeds on anything to make life that little bit more enjoyable.

No monthly payments are required – most lifetime mortgages & all home reversion plans have little impact on your budget, as the lenders require no monthly payments towards the interest charged.

Right to remain in your home – this feature enables you live in your home rent free for the rest of your life. This will be either until the last person has died or moved into long term care.

A no-negative equity guarantee – provides the assurance that no matter what, with roll-up equity release schemes, you can never end up owing more than the value of the property.

Equity Release Cons

Reduces the value of your estate – a release of equity effectively takes cash out of your property lowering its net asset value. This reduces any inheritance you intend passing onto your beneficiaries.

May affect social security benefits – if the proceeds from an equity release UK scheme are used to increase savings, then means tested benefits such as pension credit & council tax benefit could be reduced.

Early Repayment Charges – in principle, equity release schemes are designed to run for the rest of your life. Should early repayment arise, then substantial penalties could be charged by the lender.

Expensive set up costs – a combination of the valuation fee, application fee, solicitor’s fee & advice fee can all reduce the final amount you receive. Always shop around for the best equity release deals.

Difficulty re-mortgaging – upon completing a lifetime mortgage or home reversion, you have secured loan on your property. This may restrict your options to raise additional finance moving forward.

Choose an equity release scheme to suit your requirements.

A key benefit of an equity release scheme is that you have the option to obtain some of the equity from your home in the form of a lump sum or as regular cash payments. A lump sum will come in handy to those who, for example, might want to take that trip of a lifetime or maybe contribute to fund their child’s wedding celebrations. On the other hand, choosing an equity release scheme that offers regular installments can help boost your pension so you don’t feel like you want to stretch your money too far. Whichever option you choose, the significant benefit of your equity release scheme is that the money you receive will be tax free no matter what.

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