Ignore These Myths About Equity Release
It may surprise you to learn that one of the fastest growing financial services in the United Kingdom is equity release. In 2017, the level of lending in a quarter managed to exceed £800 million for the first time and this represented a 44% year on year rise. It is easy to see why people aged 55 or older are deciding to utilise their property as a source of income in their golden years.
There are many reasons why this has been the case but there have been a number of product innovations and many people feel more secure about what is on offer from equity release. This financial solution provides people with a level of financial freedom that enables them to enjoy their retirement or to help their loved ones.
However, it would be fair to say that there are some myths about equity release, and it may be that you have been holding off because of what you believe to be true.
One myth is that you no longer own your property
This isn’t the case. You, or you and your partner are guaranteed to be the sole owner of your property for the rest of your lives or until you decide that the time is right to sell. You will also find that there is a portable element to this solution so you can even move home if you so desire.
Another myth is that you may end up owing more than your property value
Again, this isn’t true. Lenders who have been approved by the Equity Release Council have a “no negative equity guarantee” and this gives you the confidence and peace of mind you need when considering this option. Knowing that your loved ones will not be left to foot a bill is a great comfort for the majority of people, and this may provide you with the confidence you need to consider equity release.
A myth is that you cannot enjoy an equity release if you have an outstanding mortgage
This is false. As long as you are able to pay off the remainder of your mortgage, you can be eligible for this style of equity release. You will actually find that many people decide to undertake an equity release so they can be free themselves of monthly mortgage payments. After the mortgage has been paid off, the remainder of the equity release can be enjoyed by the homeowner.
Many people believe that you have to make monthly payments with an equity release
This is not true and some solutions allow you to pay on a more voluntary basis. You obviously have a figure to pay off and interest is charged, so ideally it is best to pay off sooner rather than later but it is wrong to suggest that you need to make monthly payments.
It is important for people to understand that equity release has evolved and it may be more suitable than ever before for your needs. If you would like to discuss your options and find out if equity release is a good solution for your financial challenges, arrange and appointment and we will be more than happy to offer guidance and advice.