For many people who are in, or nearing retirement the idea of selling your home and buying a smaller one can be very appealing. This process, known as ‘downsizing’ can leave you with some extra cash in your pocket (after all moving costs and fees) and see you in a home that may have cheaper running costs and is easier for you to maintain.
But what if when the time comes, you are happy in your current home and don’t want to leave it, but would like some extra money in your pocket or need to repay your mortgage. In such a case Equity Release could be your ideal solution.
If you are aged 55 or older you can take a lump sum out of the value of your property and use it however you want. Typically there are no monthly repayments, the loan plus accumulated interest is only repaid when the last person named on the equity release plan dies of is taken into long term care.
Rather than moving to a home you may discover you subsequently don’t like, you can stay in the home you have lived in and loved for many years. There are many benefits of staying in your current home as you get older. If you have friends, family and nice neighbours you may find you don’t quite have the same support and friendships if you move to a new community.
This doesn’t mean that equity release is a better option than downsizing. For some people it will be the wrong solution, while for others it could be exactly what they need. It should also be remembered that equity release builds up a long term debt which will need to be repaid when you are no longer around. This means that the most likely outcome will be that the property will need to be sold, the debt repaid and the rest will then pass to your family or estate. If you want to leave your home to your family, then equity release is unlikely to be suitable for you.
This is a transaction that will affect the whole family, so it is a good idea to make them aware of your plans before you complete an equity release loan, nevertheless being able to live in the home you are happy in whilst being able to maintain a good quality of life in your latter years is something that needs to be considered.
Arrange for a fully qualified equity release adviser to speak with you, there is no obligation and if you decide not to go ahead the service is completely free. We will only get paid if and when your loan is paid to you. Call us now on 020 33 55 4837.