Go on an Equity Release Adventure: Pros and Cons
There are many reasons why people decide to take equity release. Maybe they want the independence of living in their own home for as long as possible, they want to fund their retirement, or maybe they want to help their children with a deposit on a house of their own. Whatever your reason may be, it is important that you are aware of both the advantages and disadvantages before making your decision.
The advantages of taking equity release are that it can allow you to live in your own home for as long as possible, without the concerns about how much money you have left over. It also means that someone else is paying off your mortgage so there won’t be any monthly bills; and when you want to move on from living at home, the cash will go towards a property or care costs. Also, equity release can be a good way to help your children out when they are saving for their own house.
The disadvantages of taking equity release is that you will lose the value in your home, which may mean that it could take longer to get back on the property ladder than if you didn’t take equity release; and once someone has taken money from their property, there is no getting it back. You also have less funds available every month because some of them go towards paying off what was borrowed against the value of your home or releasing capital. And finally, not everyone qualifies for an equity loan so this option might not even be open to you at all.
One more thing worth mentioning before making any sort of decision about whether or not you should take equity release is the way it can affect your ability to get a mortgage in the future. If you have taken out an equity release, lenders may see this as negative because they will think that you are using their money and might not give you a loan when applying for one.
If you are considering taking equity release, it is worth speaking to a financial adviser first for their advice and opinion before making your final decision.