Many people discover that when they stop working in their sixties or seventies, their income dramatically drops. This makes it difficult for them to retire in comfort and enjoy their lives without worry. This is especially frustrating for homeowners who often find themselves rich in assets but low in cash, with most of their wealth tied up in their properties.
For this reason, more and more people choose to unlock some of this wealth through something called equity release, but it is not something you should do lightly or without professional advice. The right companies will help you work through the option with the right mindset and a complete understanding of the benefits and difficulties involved. If you are yet unsure whether to consider this option, take a moment to consider the reasons so many others have gone this route in life.
Moving is a hassle in the best of circumstances, and yet, many homeowners choose to downsize to more affordable, smaller properties. However, that is not a feasible option for those that wish to stay in their family home after retirement or cannot handle the distress and upheaval caused by a move. Equity release enables you to stay exactly where you are while simultaneously unlocking a portion of your housing wealth. Unlike a typical mortgage, where you make monthly payments, equity release interest rolls up.
Once the plan is finished, either when you and your partner pass or move into long-term care, the interest plus the amount of your original loan will be paid back to the provider. It is important to note that taking this option will reduce the value of your estate, and this will affect any inheritance you may wish to leave to your loved ones. For this reason, contact professionals at such sites as www.responsibleequityrelease.co.uk to help you make the best choice for you.
Repay a Mortgage
Many homeowners on the verge of retirement use equity release to clear debts or pay off outstanding mortgages. In many cases, these are interest-only mortgages, and homeowners simply have not put enough away to repay the capital or their saving plans were not as effective as they hoped. It is difficult enough to save the capital needed for daily spending and necessities, but to make matters harder, there are almost three million interest-only mortgages in the UK yet to be repaid. Many of these are held by borrowers near retirement who wish to repay the balance in early retirement.
Home Improvement Funds
Finding a large lump sum in retirement can be difficult if you do not have enough savings available, and this is another reason so many people turn to equity release for help. With this option, homeowners created the chance to make crucial home repairs, replace a broken-down car, or help out a family member in need. The access to additional funds may be just what you need to help a loved one out of a difficult situation or to finally have your roof replaced. Whatever you need the money for, the right professionals can help you work through the process.