What do you need to consider when thinking about equity release?

January 10, 2022 12:36 pm

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As we grow older, the need to cover our living costs increases. The provision provided by pensions, be they state or private, may not be enough to last through the latter years of your life.  This financial pressure is keenly felt and can create anxiety and stress. However, there is an increasing solution to the problem. For example, if you own a property without a mortgage, you can look at equity release.

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Equity release takes a loan out, from a specialist lender, on your property. The priority value is calculated as if you were going to sell it.  The lender will then look at how much they can lend you. These loans are not usually based on a repayment basis, where you slowly pay of the balance. Instead, it is based on an “interest-only” basis. This is where the interest generated on the loan amount is paid. The total amount is still owed.

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Using equity release should be carefully considered. Those who will benefit from the properties sale at a later date, including yourself, will see you lose the loan amount from the final selling price. However, the immediate need for funds might be the true driving force behind your decision to proceed. Talk to Ascot solicitors https://www.parachutelaw.co.uk/ to discuss the options.