Whether you’re looking to buy a new car, invest in a holiday home or jet off to exotic shores on the holiday of a lifetime, you can have the money you want now, with equity release schemes. It’s important to be informed about these schemes before signing up, so take a few moments to read our handy guide to equity release schemes to see if they are the right choice for you.
Equity release schemes are sometimes referred to as ‘home income plans’. They are designed to help you release the equity which has built up in your home to spend on whatever you please. The money which you receive from equity release is repaid upon the sale of your home – so it’s important to seek advice and bear in mind rising and falling property prices. If your home’s price suddenly drops, you could be left with negative equity.
When hunting for an equity release scheme, there are three important points that you need to remember:
• Always seek professional advice from your solicitor or an independent financial advisor before signing any paperwork
• Refuse to be rushed – don’t deal with any companies who push you into making an instant decision. It is best to be armed with the facts for each scheme and then consider whether this is the right decision for you
• Look for schemes which provide a ‘no negative equity guarantee’. This means that your debts will never exceed the value of your property, meaning you won’t suddenly find yourself plunged into negative equity, should interest rates rise and the value of your property drop.
• Compare interest rates to find the best thta will suit you.
• Use equity release calculator to find out how much tax-free cash could be unlocked from your home.
By remembering these four simple tips, you should be well on your way to finding the best equity scheme provider for your needs.
There is no one-size-fits-all answer to this question, and that’s why you should always seek independent financial and legal advice before signing up to an equity release scheme. Remember that you can only spend this money once, which means there will be less equity left in your home to pass on to family members in your inheritance. On the plus side, equity release schemes often allow you to avoid Inheritance Tax (IHT) as you’re able to spend more of your money before you die, which in theory could leave more money in your estate for your loved ones in the future.