Should You Choose Equity Release
There is a lot of talk about equity release these days. But what exactly is it? Equity release, also known as a home reversion plan, can be an excellent way to finance your retirement if you have a substantial amount of equity in your home. The process allows homeowners with assets worth over £30,000 to generate income from their property without having to sell up and move out. Joslin Rhodes equity release advice can help you decide whether equity release is good for you or not.
Equity release is a form of reverse mortgage which allows homeowners to borrow money from their home without having to sell or move out.
The amount you can borrow depends on the value of your property and how much equity has been built up in it over time. In some cases, borrowers have received as little as 25% of the total value for a loan that pays an interest rate at around half that offered by banks on savings accounts. It’s also possible to pay back the loan gradually over a number of years with no early repayment charges if necessary.
A big benefit of this type of scheme is not having to worry about complicated paperwork such as income statements and tax returns since there are no credit checks involved application process; however, those who aren’t able to repay the loan and interest may lose some or all of their equity.
However, there are a number of risks associated with equity release schemes that should be considered before taking out one of these plans. One such risk is the possibility that you may die soon after taking out the loan and your estate would then have to repay the debt plus interest.
It’s also important to remember that if you do take out an equity release plan, it will reduce the inheritance available for your loved ones.
Before deciding whether or not an equity release scheme is right for you, be sure to consult with an independent financial advisor who can help weigh up the pros and cons of this type of arrangement based on your individual circumstances.