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Equity Release Drawbacks

Equity release could be a good option for those homeowners who need to free up some cash in order to live more comfortably into their old age. Many homeowners have substantial money tied up in their homes and could benefit from equity release, but there are certain equity release drawbacks and it is important that serious consideration is given to alternative courses of action. But, if equity release turns out to be the most suitable option for you, then you could benefit from the capital available to you. There are several things to be aware of if you are considering equity release; drawbacks include:

You must be 55 or over to qualify for equity release
A lifetime mortgage is effected and all the interest due will be rolled up and added to the final amount payable when the house is finally sold
The value of the inheritance you leave is likely to be reduced
You may have to pay a penalty if you find you are able to redeem the mortgage before your death
Home reversion schemes, where part of your home is sold to a home reversion company, cannot be cancelled

To find out more about both equity release drawbacks and benefits, simply fill out the form and an experienced advisor will be in touch to talk you through the options.

Lifetime mortgages as from October 2004 are regulated by the Financial Services Authority. A lifetime mortgage is a loan secured on your home. The loan and interest are normally repaid from the proceeds of the sale of your home when you die or move into long term care. With a home reversion plan you sell all or part of your home for cash. However you do not get the full market return for doing so.

The above equity release mortgage detail is for information purposes only as does not constitute financial advice under the Financial Services and Markets Act 2000. When considering any type of equity release product, it is important that you seek independent legal advice.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.