Why release equity from your home?
The reasons why people release equity are many and varied, though just as important are the reasons why not to. Our advisers will go through your financial situation in depth and rule out all other possible options before recommending an equity release solution. Some of the reasons you may wish to release equity, along with some of the alternatives you should consider first, are listed below.
If your home is no longer suitable for you but you would rather avoid the option of moving to a smaller or more appropriate home, then releasing equity could allow you to have the necessary work done to continue to live in and enjoy your home. However, local authority assistance may be available as an alternative if your renovation is for health reasons.
Helping your Family
Sometimes we want to help our family financially now, rather than when we are gone. This could be to help fund a marriage, as a deposit for a home, or even for grandchildren's education. This is likely to reduce the amount of inheritance which will ultimately reach our beneficiaries, but you might consider this worth it to help them sooner rather than later.
Improving your Income
Sometimes the income we receive in retirement is a long way from what we'd like. Releasing equity may help buy an additional income for life, which could even be tax free. Before considering this, could you downsize to a smaller/cheaper home instead? The freed funds might buy the income you need at lower cost. Ask your adviser if this would be feasible.
Re-Mortgaging For Good
If you're over 55, have a remaining mortgage and either have no way to afford the final payment or you can no longer afford the regular payments then a lifetime mortgage could be a suitable option. This will allow you to live in the property for as long as you are able. You could either pay the interest only forever, or allow the interest to roll up.
Holiday & Leisure Expenditure
If you have aspirations of long cruises or the holiday of a lifetime but your retirement planning hasn't been sufficient to fund these things, equity release may be a suitable way to raise funds. This should only be considered after use of investment assets or taking conventional finance has been ruled out. We can help you evaluate the options.
If you or your spouse must fund care, it may be possible to release equity to meet your care needs ongoing and hence protect the remaining value of the estate. In many cases this will not be an appropriate option so it's important to seek professional advice. Consider taking long term care advice at the same time as equity release advice (we can help with both).
If you believe an equity release solution could be appropriate for you we'd recommend talking it through with an independent financial adviser. Click "next" to read about some possible solutions.