If you incur some unexpected costs or set-backs in life, it often becomes hard to see the wood from the trees financially. However, exploring the possibility of equity release can be the answer and put you back on track without any additional financial hardship.
If you’re new to the term equity release, it essentially means that you can leverage the value in your home, for example, by receiving a lump sum or a steady stream of income from a lender in return for them taking stake in the ownership of your property. You will also see this referred to as re-mortgaging.
The lender will be repaid either gradually, or when you decide to sell the property. Agreements can also be put in place so that the lender is repaid following your death when the property is sold by your loved ones, so equity release can be something that gives you peace of mind without having to make any repayments during your lifetime.
In this article, give you the top five reasons for considering equity release in the UK.
- Rising cost of living
Once you retire, you could be forgiven for thinking that it’s now time for life to be much simpler. However, one factor now catching many people out in retirement is the continual rise in cost of living. Food and energy bills can really catch you out, and so releasing equity in your property can help you pay these costs and live comfortably.
- Clear debts, once and for all
Debts can catch-up with all of us, and eventually many people have just had enough of the constant battle of staying on top of repayments. For pensioners, outstanding mortgage payments or other debts can be a real headache, with some even choosing to go back to work part-time to secure an income.Re-mortgaging your home for a lump sum can alleviate these pressures, giving you enough cash to pay off all of the debts that remain while not giving you additional debts to pay off during your lifetime.
- Early inheritance
Seeing your loved ones struggle financially can undoubtedly be one of the more uncomfortable experiences of growing old. Whether they’re trying to buying a car, put their own kids (your grandchildren) through university or getting themselves on the property ladder, it’s an expensive world in which we live. Taking an equity release can allow you to provide your loved ones with an early inheritance, helping them on their way in life.
- Pension problems
Whether it be the continuing rise of the age at which you can collect your state pension, or perhaps your pension is so low that you cannot afford to take a holiday or save up for something nice. Pensions are becoming increasingly problematic. Equity release can provide you with either a lump sum of cash, or a regular income which will enable you to relieve the pressure that poor pensions in Britain are creating for our retirees.