Top 3 Myths About Equity Release
Equity release can potentially be a financial life saver for later life. However, there still seem to be a few misconceptions about the process. Your financial situation might change during retirement, particularly if you don’t have a proper pension. You may wish to help your family with university fees or maybe you need to make much-needed home improvements, things that are made easier thanks to equity release.
Myth #1: Your home won’t be yours anymore
A lifetime mortgage doesn’t mean you don’t own your own home. You will always retain legal ownership of the house you live in for life (or should you move into a long-term care facility). As long as you keep your present property your primary residence, you will always own your home.
Should you still have an outstanding mortgage, it won’t affect your request for equity release. All that’s required is that you ensure that your existing mortgage balance is repaid, choice can either be done through your savings or through the equity release. After this is done, you are still able to be eligible for lifetime mortgage, with the rest of the money released yours to be used as you wish.
Myth #2: Your children will be left with no inheritance or with debt
There are equity release plans that can safeguard against your family having no inheritance. A very common misconception, you simply need to consider the right equity release plan for you. Certain plans help to protect your equity; they can guarantee that you’re able to release the money you need right now, while still leaving an inheritance for your children.
The amount available to be released is likely to be reduced, but you can relax in knowing that your family is taken care of. When your home is eventually sold, your lifetime mortgage is paid and no other fees owned. As the income from the sale finances the payment, you won’t be left with any debt.
A no-negative-equity guarantee makes sure that neither you not your family need to repay a higher amount than what your home’s market value.
Myth #3: You’ll be unable to move home ever again
Considering your financial options can seem daunting, but you will still be able to move home should you wish to. Equity release isn’t the right solution for everyone, however, you won’t be locked in your present home should you choose this option. You can move or downsize, should you wish to, although certain restrictions may apply.
Choosing an equity release plan that already accounts for downsizing protection allows you to complete your lifetime mortgage payments without financial penalties. Simple use the income from selling your present home. Should you move homes, your equity release plan goes with you.
Having a comprehensive understanding of what equity release is will ensure that you make the choices you want with your finances. You can get in touch with us today on 03333 441115 for more information or use our equity release calculator to estimate how much you can release.