As you enter retirement years in life, you may be thinking about equity release. Having heard about it briefly either on an advert or through one of your friends, you might be looking to find out more about it in-depth, before deciding whether it’s the right decision for you. Fortunately, we have compiled everything you need to know about equity release, so you can make an informed decision.
What Is Equity Release?
Ultimately, equity release is a way of turning the value of your property into cash. There are a number of policies which will enable you to access the money that is currently tied up in your home. What’s more, you don’t even have to have fully paid off your mortgage. So, do you have to release the money in one large sum?
No. There are a number of different ways that you can release the money that is tied to your property. You can either take it out in:
- One Large Sum
- Smaller Amounts (you will have to pay interest on this)
- Combination Of Both
It’s important that you speak to a professional about which way is better for your money, otherwise, you could end up with a lot of interest and owing more back than you originally thought.
How Does Equity Release Work?
When it comes to equity release, there are a couple of routes for you to take.
If you don’t have anyone who can inherit your assets, it may be worthwhile choosing lifetime mortgage. This is a popular option amongst those aged 55 years or older. It means that you can borrow some of the value of your house at a fixed or sometimes, capped interest rate.
The other type of equity release that you can opt for is Home Revision Plan and for this you need to be 60 years of age or older. The provider you choose will pay you a tax-free lump of money for just a portion of your house. Choosing this option means that you are able to live in your property until you no longer need to live there, without having to pay rent.
Is Equity Release Safe?
When deciding whether equity release is right for you, one of the biggest questions you probably have on your mind is; is it safe? You can rest assured that equity release is incredibly safe. In fact, it’s fully regulated by the Financial Conduct Authority. Additionally, there are many advisers and providers that are members of the Equity Release Council are, so they must obey the code of conduct, which was put in place to protect customers.
Plus, due to the ‘no negative equity guarantee’, you won’t ever owe more money than the worth of your property and because of the ‘security of tenure’, you are entitled to the right to live in your house for the rest of your life.
What To Do If You’ve Decided That Equity Release Is Right For You
If you have decided that equity release is the right choice for you, we have an expert and respectable team at Preuveneers who can give you professional advice in regard to Equity Release. If you would like more information about our services, get in touch with a member of our specialist team and we will help you and advise you in any way that we can.