6 Things You Can Do to Receive Equity Release

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Equity release is a way of obtaining a lump sum from a house that has value while still retaining it. In this case, ‘equity’ means the difference between the market value of your property and any outstanding mortgage or other debt secured on it. For instance, if your home is worth $350,000 and your mortgage is paid off, you would have $350,000 equity. If it is worth this amount and you have an outstanding mortgage of $50,000, you would have $300,000 equity. Having an unpaid secured loan can also decrease the amount of equity that you qualify for down.

The deal here is, the income-provider must be paid later on and in most cases, upon the owner’s demise. Nonetheless, approaching equity release requires prior preparation and forethought. This having been mentioned, here are some 6 things you can do to receive equity release.  

1. Downsize:

Consider alternatives like moving to a small home because this will cost you less with the shifting expense rather than the charges that come equity release. Any decision has its pros and cons but it’s always good to settle for the one that suits you best according to your needs.

2. Involve your partners/family:

Taking an equity release plan is a big decision. It is essential to involve your partner because this means you won’t be able to leave the full value of your home behind for your loved ones. You can even consider attending appointments related to this issue together so that they can be on the know.

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3. Understand the product:

You may not be in a position to understand the product by yourself. In this case, you will need an adviser who will take you through it. A responsible equity release firm like responsibleequityrelease.co.uk will include claiming of welfare benefits, the local authority, inheritance tax etc.

4. Get professional advice:

First of all, do your own research then from there, you can make a decision on whether it’s right to go ahead with your decision. The adviser here comes in to help you decide whether the equity solution is the right choice. If not, he can offer other available plans.

5. Get an equity plan that works for you:

Get a plan that suits your circumstances, which is something your adviser can help you with. Consider if you want to take all the money as a lump sum in cases where you might be having financial constraints. If not, go for smaller amounts when need be.

6. Think about why you need the money:

Equity release can help in retirement. If you have a mortgage, the money you release can help pay that up first, perhaps along with other debts. If there will be any money remaining, you can spend it as you wish e.g. topping up your pension.

In conclusion, we see that the cash sum you borrow depends on your age and the value of your home. It is, therefore, wise for one to invest while they still have the energy to, so that when they grow old, and the need arises for one to get an equity release, they can get one that suits their need as per that time. It is also important to work with a professional adviser in the process, who can guide you in decision-making, as well as educate you on the various protocol and procedures involved in the equity release process.

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February 8, 2019
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