Over £1bn of housing wealth was unlocked between June and September 2018 and equity release lending is showing no signs of slowing down. But, equity release might not always be the right answer.
Always speak to an expert before making any decisions, but here are 5 situations in which equity release could be a suitable option:
1. You don’t want to downsize
Many people find themselves cash poor but in a house that is much bigger than they need. But, for many, the appeal of moving home isn’t high and can be a costly process. Equity release plans enable you to stay in your property whilst accessing some of the cash tied up in it.
2. You need to repay an interest only mortgage
Did you take out an interest only mortgage years ago? Is it due to end soon? Equity release could provide you with a way to repay the capital.
The main advantage of using equity unlocked from your property to pay off an existing mortgage is that you’ll have no monthly payments to make.
3. You want to make home improvements
Instead of moving, another option is to make home improvements. Many find that equity release is a great way to fund those improvements.
If you’re looking to make home improvements or renovations, equity release is one way to fund them.
4. You need to supplement your retirement income
High living costs and low interest can mean it’s often difficult to make ends meet as a retiree. Equity release can offer a boost to your income.
5. You want to provide financial support to your family
Equity release can provide you with a ‘living inheritance’. This could help your family buy their first home, access better schools and contribute to general living expenses.
Equity release can be a fantastic option in many cases but that’s not to say it doesn’t come with its risks. Always speak to someone who understands the market before making any decisions so that you can make an informed decision and find the product that suits your needs.