Do You Have Equity?
Equity release is a type of financing that people can use to access the equity in their property without having to sell it.
The equity release is a lump sum of money that the borrower receives. This can be used to purchase an annuity or to set up income payments for life.
This type of financing will involve making regular repayments on the loan until it is fully repaid in full when you die or move out of your home. You will not have any responsibility for paying off this debt if something unfortunate were to happen to you before then.
You can spend your money in a variety of ways with equity release. You may use it to:
Purchase an annuity contract that will pay you a regular income for life or one lump sum in the future. This type of arrangement can be useful if you are unsure how long you have left to live and want peace of mind, or need money upfront but don’t wish to sell your home
Set up a monthly payment plan so you receive an income when retired
In order for equity release to work as well as possible, there are certain things that borrowers should think about before applying:
They should make sure they understand their financial situation fully by taking expert advice from a debt adviser on whether this is the right solution for them
The borrower needs to be able to make repayments, or the deal won’t work
The loan will be secured against a borrower’s home in order to provide security for a lender.
Some equity release providers require borrowers to take out life cover as part of the arrangement. This helps their loved ones will pay it when they die and may not have sufficient funds from their pension pot left.