Before you actually look for equity release, there are certain considerations and requirements that you need to fulfil. While the requirements do differ, some of the common requirements are as follows:
– The homeowner’s age must be either 55 or above.
– The person must have a property with a minimum value of £75000 and must be able to release at least £15000.
– The person must have no mortgage or very little mortgage. In case they do have mortgage, the amount released should be used to pay it off.
Looking at the pros and cons of equity release? We can help you out!
What are the Advantages?
– There is an inheritance guarantee provided which can be used to safeguard a percentage of the home’s value.
– There is a no negative equity guarantee.
– The home owner does not have to pay anything monthly. Interest and loan cumulatively are repaid through the sale of the home after either death of the homeowner or if they’re going into long-term care.
– An equity release advisor usually advises the homeowner before such a release is signed, and the homeowner is suggested to involve an independent solicitor too.
What Should you Be Careful About?
Some aspects of the homeowner’s future and finances will be affected through this:
– This release may affect eligibility for welfare benefits.
– This release can also have an effect on tax position.
– If the homeowner intends to sell the home or part of it, this release isn’t a good idea.
– This release can also reduce the inheritance.
– This is a lifetime commitment and should be carefully thought out, not rushed into.
There are many pros and cons to equity release, so be sure you have all the information.