A valuable tool which allows you to free cash from your property after retirement, equity release products are growing ever-popular.
However, if you are considering equity release, it is essential that you seek specialist advice from a professional. Here are the benefits of equity release advice.
The number of available equity release products has increased significantly, from 58 in 2016 to 139 in 2018.
The two broad categories of equity release are home-reversion plans and lifetime mortgages, which each have varying features. Some plans allow ad-hoc or regular payments and no early repayment fees. A specialist can talk you through all the available plans and options.
Costs can grow
As with most equity release products, the interest is rolled up, with the loan repaid if you move into care or die. The compounding nature of interest means the total owed can quickly grow.
If you live for a long time after taking the loan out, the debt could eventually exceed your property’s value so it is important to choose a plan which has a no-negative-equity guarantee. An adviser will recommend products which protect your estate against additional costs.
Some loans have low charges and competitive interest rates, as well as optional features which can save you money. There are also drawdown products which drip-feed equity as required, meaning you pay interest only on the money you have used.
An adviser will discuss how to limit the costs and find a product with the right mixture of features.
For equity release Wroughton based firms such as https://chilvester.co.uk/equity-release/ offer advice.
Protect your inheritance
With equity release plans, there will be a smaller inheritance for you to pass onto your loved ones.
An adviser can talk you through plans which allow some equity from your home to be ring-fenced as a guaranteed inheritance and help you maximise your estate’s value.
Ensure equity release is for you
A specialist adviser can evaluate your personal circumstances and make recommendations, as well as guide you through all the options. There are alternatives available such as other methods of borrowing, like remortgaging or downsizing.
When choosing to release equity, it is important that your current needs and future wants are understood. By using a portion of your property’s wealth now, you could affect your entitlement to benefits as well as reduce your estate’s value.