Increasing numbers of homeowners are finding themselves in the old cliché of becoming ‘asset rich and cash poor’ when they reach retirement. While this may be less of a problem while still working, it can assume greater significance after retirement, or when someone is looking to scale back their working hours in preparation for retirement.
These are the points at which many people start to think about ways to realise some of the value of their home, while still living in it. Some may consider downsizing, but others may seek equity release help. The question that then follows is where do I find this, and how do I know an equity release adviser I can trust? It is important to be clear that equity release products have higher interest rates than ordinary mortgages. However, none of this accrued interest needs paying until after death and it’s important to note these equity release interest rates are usually fixed for the rest of the homeowner’s life.
Interest accruing at a fairly standard rate of 5% in today’s market, generally results in the overall debt doubling every 14-15 years. Generally, the older you are when you release equity from your home, the more you can borrow, however the less time for the debt to accrue. This is why younger people may not be able to release as much equity from their home.
Equity release advice can be offered to homeowners from age 55, however, it is always assumed better advice to leave until age 60 has been surpassed. This decision would always be discussed by a quality equity release specialist and they would offer a recommendation and advice on whether now or later would be a suitable time.
Anyone interested in equity release should also note that the cheapest equity release deal is not necessarily the best. This is why it is so crucial to seek equity release help from professionals, who can advise on individual circumstances. Equity release schemes now come in various guises, with many product features to cater for changing situations that retirement can bring.
For example, someone with dependants will have very different considerations from someone who does not, as the roll-up of interest may not be a concern to people with no children or beneficiaries. They would not be as bothered about what they leave & their attitude towards retirement maybe more of a ‘live for today’ mentality.
A final consideration is the potential effect a large cash sum can have on benefits, including pension credit. Here is where equity release advice & the fee is worth its weight in gold. Getting quality advice, or visiting sites such as Entitledto will help mitigate any potential loss of benefits which could occur should poor equity release advice be found. Ultimately, whether or not to seek equity release advice is not the question. No equity release lender will ever accept an application without receipt of advice from an industry qualified adviser.
The question should be where do I find the best equity release advice?
Finding this advisor with suitable professional qualifications will help you explore all your potential options and weigh up which is the best recommendation for your circumstances.
