With the value of pensions having decreased over the past few years, those at or near retirement age are having to find new ways to raise the money that they need to support themselves. There is also a generation of people who want to be able to do a little more with their retirement than may be possible on their current income. For these people, releasing some of the equity in their home may be a way of raising funds.
What it entails.
Unlike an ordinary loan or mortgage, equity release is a means of having access to the money that is tied up in your property without having to pay back a monthly amount. The home owner can remain in their home for the rest of their life and still have the money for a few of life’s little luxuries. As much or as little can be taken out of the equity as needed and this is either relieved as a cash lump sum, or as a monthly amount. The equity release company recovers the amount borrowed, plus interest, on the death of the homeowner.
The benefits.
Equity release can make a substantial amount of cash available for you to use now. If you are fit and well and have always wanted to travel, you can use some of the money towards the holiday(s) of a lifetime. If you require a little more help as you get older, the money can be used towards maintaining your independence and giving you a decent quality of life. Whilst the amount of money that you can leave to your relatives in your will may be reduced, no loving child would want to see their parents struggle in their later years.
How much could you borrow?
The amount available through an equity release scheme varies, depending on the current value of your home and whether or not there is any outstanding borrowing tied to the property. A very useful equity release calculator from agepartnership.co.uk allows you to input your details in order to find how much it may be possible for you to borrow. This information is a good first step to finding out more about whether this scheme is suitable for you. The site will also give answers to a number of other related questions so that you can make an informed decision as to whether or not to take your query further.
