Equity release is an option available for homeowners in UK to release tax-free funds from their home without having to sell up or move. It can play an important role to manage your retired life finances, and the safeguards that are built into its plans allow you to tap safely into some of your property wealth without having to worry about making recurring repayments if you don’t want to. Equity release can provide you with a large sum of money to spend while enabling you to continue living in your home. The money you unlock through equity release is all tax-free.
Types of equity release plans
There are commonly two types of equity release:
Lifetime mortgage
This is the most common type of equity release. You borrow money against your home. The mortgage is usually repaid from the sale of your home when you die or move permanently into residential care.
Home reversion
You raise money by selling all or part of your home while continuing to live in it until you die or move into permanent residential care. But whether you sell all or only part of your home, you won’t receive full market value for it, so bear this in mind when making your decision.
Eligibility criteria to get equity release
There are some criteria to get equity release in UK which can be listed as:
• Your age should be 55 or over
• You must own property in the UK
• Your property must worth at least £70,000
What are the benefits of equity release?
There are lots of advantages of equity release which gives you money to spend now , rather than left it in a safe or vault in your home.The UK’s hike of house prices means that a large major proportion of homeowner’s wealth is sunk into their property,so it’s out of accessible.Such your home has increased in value gradually over the years, equity sanctions you to get at some of that money boost your retirement income instead of leaving it all to your inheritors or to cover persistent care costs.
What are the risks and perils of equity release?
The major drawback of equity release is that it doesn’t pay the full valuation for your home.You will receive far less money than you would from selling the house on the open market but in that situation you would still have to find somewhere else to live.Another deprivation of equity release it that it will curtail the amount of heirloom your receivers could otherwise collect the distinct liability or risks vary with the type of scheme.
Best Equity Release Providers in UK
We all should know about the best equity release companies because they offer great service and their knowledgeable advisors. Some good equity release providers in UK like:
- Sunlife
- Hodge Lifetime
- Aviva
- OneFamily
- Legal & General
- Nationwide Building Society
- Pure Retirement
These are top in the “United Kingdom” because their team of professionals has fight the market and compared above 600 plans.Not only compared but they produce up to date list.
Alternatives of Equity Release
There are many alternatives to Equity Release, which are more easy to avail in UK. Some of these can be Selling assets, Remortgaging, Moving to a cheaper home, State benefits and lots more. As Equity release is not suitable for everyone, and considering all your alternatives is an essential part of the advice process.
