Money makes the world go around, but it also causes people an immense amount of stress and for many, it is their biggest concern in life. For those that are looking to boost their finances, cover a large expenditure, or simply improve their lifestyle, equity release could be a good option that can make a significant difference to the lives of many.
What is Equity Release?
So, what exactly is equity release? Equity release is available to homeowners aged 55 or older and allows you to free up some of the cash tied up in your home. You can take this as a lump sum or in monthly installments both tax-free and use it as you wish.
People use equity release in many different ways to improve their lives. A few of the most common uses include:
- Boosting retirement fund
- Paying for a holiday
- Home improvements
- Pay off debts
- Helping loved ones to buy a home
- Improving general lifestyle
Equity release is a major financial decision to make and not one that should be made lightly, but evidence shows that those that do opt for equity release usually benefit from the decision.
Will Hale, CEO at Key, comments on how it can improve people’s lives:
“Equity release has made a significant difference to the lives of many people and has evolved into an industry that with a clear focus on customer needs. Very few industries can say that 90% of customers would or have recommended their products to others and only 10% say that taking out a plan has not improved their standard of living.”
There are a handful of benefits to equity release over other financial products that should be considered.
You Get to Stay Put
When many people reach retirement, they decide to downsize to free up cash. You don’t have to do this with equity release as you can stay put and improve your home (many choose to future-proof their property).
Monthly Payments are Optional
The monthly repayment is optional when you use equity release as you do not need to repay the loan or interest until the home is sold when you die or move into care. This allows you to boost your finances, although many people decide to pay off the interest to keep the debt down.
Access the Money When You Need it
You can also access the money as and when you need it whether this is a lump sum or accessing smaller amounts over time to provide a regular income.
You Could Avoid Inheritance Tax
You need to consider inheritance when it comes to equity release, but it can help you to give your family a cash gift while avoiding inheritance tax.
Equity release can be a great option for many homeowners and boost their finances, but you should always speak to an expert to see if it is right for you.