Equity Release: How to Get Money Out of Your Home in Retirement
Are you retired and looking for extra money? Equity release may be a good option for you. This financial strategy allows homeowners to access money tied up in their home without having to sell it. Keep reading to learn more about equity release and how to get the most out of your home in retirement.
What is equity release, and how does it work?
Equity release is a way for homeowners to access money that’s tied up in their home. This can be done by taking out a loan against the value of your home. With equity release, you can stay in your home while still getting cash to cover expenses.
You won’t need to make monthly payments on the loan. This will be repaid when you die or move into long-term care. The loan, plus any interest that’s accrued, will be paid back from the sale of your home.
The different types of equity release products available
There are two main types of equity release products: home reversion plans and lifetime mortgages. With a home reversion plan, you sell all or part of your home to a provider in exchange for a lump sum or regular payments. With a lifetime mortgage, you take out a loan against the value of your home but don’t have to make any monthly repayments.
Both of these products have their own pros and cons, so it’s important to compare them before making a decision. You should also speak to a financial advisor to see if equity release is the right move for you.
Things to consider before releasing equity from your home
Before you release equity from your home, there are a few things to keep in mind.
First, equity release will affect your entitlement to state benefits. You should also think about how the money you receive will be taxed.
Releasing equity from your home can also have implications for your heirs. They will have less money to inherit when you die.
Finally, you should consider the fees associated with equity release. These can include an arrangement fee, valuation fee, and early repayment charges.
Equity release is a big decision. Be sure to do your research and speak to a financial advisor before making a move.
How to decide if equity release is the right option for you
Equity release may be a good option if you:
- are retired and looking for extra money
- want to stay in your home while still accessing cash
- don’t need to make monthly repayments on a loan
- are okay with having less money to leave to your heirs
If you’re considering equity release, be sure to do your research and speak to a financial advisor. This way, you can make the best decision for your unique circumstances.
The pros and cons of equity release
Equity release has both pros and cons.
Some of the main pros include:
- You can stay in your home while still accessing cash.
- You don’t have to make monthly repayments on the loan.
- It can be a good way to generate extra income in retirement.
Some of the main cons of equity release include:
- It will affect your entitlement to state benefits.
- It can have implications for your heirs.
- There are fees associated with equity release.
Before you decide to go ahead with equity release, be sure to weigh the pros and cons carefully.
How to find the best deal on an equity release product
If you’re considering equity release, it’s important to shop around for the best deal. There are a few things to compare when looking at different products, such as:
- The interest rate
- The fees
- The repayment options
You should also consider how the product will affect your entitlement to state benefits and your inheritance.
When you’re comparing different products, be sure to use an equity release calculator to see how much each one would cost you. This will help you find the best deal for your unique circumstances.
Get expert help before releasing equity from your home
If you’re thinking about releasing equity from your home, it’s important to get expert help. A financial advisor can help you understand the pros and cons of equity release and find the best deal for your needs.
Equity release is a big decision. Be sure to do your research and speak to a financial advisor before making a move.
We can help
At Zivillo, we can help you compare equity release products and find the best deal for your needs. We have a team of experts on hand to answer any questions you have.
Get in touch with us today to start comparing equity release deals.