Equity Release: 3 Things you must know before you start

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Investigating Equity Release as an option for your retirement can be a complicated process if you set about doing it on your own so, to assist you in your research, we’ve compiled three easy starting points to get you thinking about your Equity Release solution.

There are different types of equity release

The main two types of equity release are a lifetime mortgage and a home reversion plan and both have numerous variations, which can alter your Equity Release experience. A lifetime mortgage, for example, could take the form of a drawdown, which gives you flexibility to choose when you release the equity in your home. This could be useful if you know you want to withdraw a lump sum in a number of year’s time to help your children or grandchildren buy a property. On the other hand, a home reversion plan means that you receive a tax free lump sum straight away, part of which could be used for the same purpose. Understanding all of the different variations of Equity Release can help you to start thinking about which might work best for you.

Suitability will depend on your circumstances

Though understanding the different types of Equity Release is important, it is equally important to realise that choosing the correct solution should be something defined entirely by your circumstances. As a rough guide, Equity Release is normally only available if you are aged 55 or over and have a property which is mortgage free. Other common characteristics that make Equity Release a suitable solution can be that you are unable or unwilling to move house. You may also have a low or inadequate level of income in your retirement: whether unexpectedly or otherwise. Like many financial solutions, Equity Release is a specific tool for specific circumstances and should be researched carefully.

Equity release should be accompanied by advice

Because of the above it is particularly important that Equity Release is something you engage with through the medium of professional advice. It may be difficult to tell if it is suitable for you to use as a solution and it also may be difficult to know whether there may be a better alternative within the financial marketplace. Professional guidance can also help you to avoid Equity Release solutions that offer poorer than average returns or service. If you are considering Equity Release as a solution and would like to talk with us about your options then please do get in touch via the Contact page and we will be delighted to assist you.

THINK CAREFULLY BEFORE SECURING OTHER DEBT AGAINST YOUR PROPERTY.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER DEBT SECURED ON IT.

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