Are you looking for information on equity release? You’ve come to the right place. In this blog post, we will provide you with tips and advice for getting started with equity release. We will also provide a step-by-step guide on how to proceed with this process. So, whether you are just starting out or you are already familiar with equity release, this blog post is for you.
What is Equity Release?
Equity release is a way of releasing the equity in your home without having to sell your property. You can do this by taking out a loan against the value of your property. The loan is typically repaid when you die or move into long-term care.
Paying for Equity release advice
Some Equity release companies will boast of not charging for advice, however, you need to ask a few follow-up questions if they are promoting that they don’t charge for advice, are they restricted to a certain provider where they get paid from the provider, if they are restricted to one provided then it could be likely that you aren’t getting the best possible rate or product suited the bet to your needs.
Alternatives to Consider
Before you decide to release equity from your home, it is important to consider all of your options as this may reduce or even erase the need to borrow. There are a number of alternatives to equity release that you may want to consider, such as:
Grants
If you are a homeowner, you may be eligible for a grant from the government.
Home improvements
You could make some home improvements that would increase the value of your property.
Selling your home
If you are over the age of 55, you could sell your home and downsize to a smaller property.
Taking out a mortgage
You could take out a mortgage on your property and use the money to fund your retirement.
Investing in a property
You could invest in a property that would provide you with an income in retirement.
As you can see, there are a number of alternatives to equity release that you may want to consider. It is important to speak to a financial advisor to discuss all of your options before making a decision.
Borrowing What You Need
One of the benefits of equity release is that you can borrow what you need. This means that you can release as much or as little equity as you need, depending on your circumstances. However, it is important to remember that the more equity you release, the less inheritance you will be able to leave to your beneficiaries.
Another benefit of equity release is that you can take the money out in a lump sum or in smaller amounts, known as drawdowns. This means that you can take out the money as and when you need it, which can be helpful if you are funding home improvements or other expenses.
Think About Interest Charges
When you take out an equity release loan, you will be charged interest on the loan. The interest rate can vary depending on the provider and the type of loan that you take out. It is important to compare different providers to get the best deal.
You should also think about how the interest charges will affect your estate. The interest charges will increase the value of your estate, which means that your beneficiaries will have to pay inheritance tax on the value of your estate.
Questions to Ask
When you are considering equity release, there are a number of areas to consider than just a competitive interest rate alone. Questions that you should ask yourself:
- How much money do I need?
- How will the interest charges affect my estate?
- What are the alternatives to equity release?
- What is the best way to release equity from my home?
- How much will it cost me to release equity from my home?
Questions to Ask When choosing an equity release plan:
- What is the interest rate?
- How long will I have to repay the loan?
- What are the early repayment charges?
- What are the fees associated with the equity release plan?
- What happens if I move or sell my property?
If you decide to release equity from your home, it is important to choose a plan that is right for you. There are a number of different plans available, so it is important to compare different providers and to speak to a financial advisor to get advice on your specific circumstances and find the right fit for you.
Involve Family or Someone Close
If you are thinking about releasing equity from your home, it is recommended and important to involve your family or someone close to you in the decision-making process. Remember, releasing equity from your home could reduce the inheritance you’re able to leave behind, so it’s important to weigh all of your options before making a decision which your financal advisor can help advise in. Borrowing only what you need and thinking about how interest charges will affect yourself and your beneficiaries.
Impartial financial advice
There are a number of different providers of equity release products, so it is important to compare different plans before you make a decision. You can speak to a financial advisor to get impartial financial advice before you make a decision. This is because equity release can be a complex financial product and you need to make sure that you understand all of the implications before you make a decision.
Use an Experienced Solicitor
If you are thinking about releasing equity from your home, it is important to use an experienced solicitor. They will be able to advise you on the legal implications of equity release. They will charge you a fixed legal fee. This means that you will know how much it will cost you to release equity from your home before you make a decision.
Specialist Advice with investing
If you are thinking about releasing equity from your home to invest, you should get specialist advice. This is because there are a number of legal and tax implications that you need to be aware of. You should speak to a financial advisor who is experienced in equity release and investing. They will be able to give you specialist advice on your specific circumstances.
If you would like to discuss equity release with an advisor, please contact us. We would be happy to talk to you about your options and provide you with impartial advice.
