Equity Release Pros and Cons

equity release

By taking out an equity release on your property, it may be possible to generate a useful secondary source of funds that can be used for a variety of different purposes. When searching for a suitable equity release the pros and cons of a proposed deal should be carefully considered, as the majority are permanent.


These types of agreement are generally aimed at older people who are property rich, but are cash poor. In terms of eligibility, customers will usually be expected to be over a certain age (usually retired) and to have paid off any existing mortgages on their property.


Please see the link below for an equity release quote.

 

There are two different types of equity release available to customers; here is a brief explanation of each type:

 

  • Lifetime Mortgages - this is an arrangement whereby you release a lump sum of equity from your home while maintaining complete ownership of it.

 

  • Home Reversion Plans allow the policyholder to sell a share or all of their property to a lender in exchange for the guarantee that it will not be sold until after they have died.


Both of these agreements work on the basis that after the homeowners has either been moved into care, or has passed on, their home will be sold and a portion of their estate will then go to the provider to cover the cost of the loan.


Equity Release Pros and Cons


 

Pros:

  • Customers may spend the money on whatever they wish, perhaps on a one off holiday or even as a way of supplementing the income from their pension
  • The customer can continue to live in their home for as long as they wish


Cons:

  • Selling a share in the property will automatically reduce the value of the customers estate, as a portion of it will go to the lender
  • The loan received may not reflect the actual market value of the property


If you have considered the pros and cons and think that equity release is still the best strategy for you, you should click on the link below to get a equity release quote today.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. Equity release may affect your entitlement to state benefits and will reduce the value of your estate. It may involve a lifetime mortgage or home reversion plan. All content set out in this website is provided for information only and should not be considered as advice. It is strongly recommended that you seek advice of a qualified, independent financial advisor before making any decisions to take out an equity release product.