Points to consider when making a decision about equity release

Before taking Equity Release it is recommended that you should consider whether there may be other suitable alternatives. Some possible alternatives to equity release are detailed below.

Could you downsize?

Could you sell your home and buy a cheaper one. Of course this may not be possible either because you couldn’t find anything cheaper, or because no one is interested in buying at the time you need the money or simply your health wouldn’t be up to a move.

Do you have savings or investments you could use instead?

This will be much cheaper, but you may not have enough.

Could your family help instead?

Equity Release will reduce the inheritance you are able to leave to your beneficiaries so it is important to involve your family in your decision. To avoid any unpleasant surprises your adviser would suggest you discuss your plans with your family as to avoid them receiving less on your death, they may even be willing to lend you the money you require. Of course you may have no one to turn to or be unwilling to ask them.

Have you considered other ways of borrowing money?

This could be a conventional mortgage or loan. These would prevent the debt getting bigger which is what would happen with a Lifetime Mortgage and would help preserve more equity in the property either for your use later in retirement or to leave for beneficiaries. However such alternatives would necessarily involve you in monthly repayments which of course you may not be able to afford or wish to avoid having.

Are you eligible for Means tested State Benefits?

If you need more income and are not receiving Income Support/Pension Credit or Council Tax benefit you may find you are eligible for these benefits which may make all the difference. If you are already receiving such benefits releasing equity could have an effect on them and you should check this out before proceeding.

Assistance may be available from your Local Authority or charities for some essential home improvements and repairs.

Consider your future needs as well as your current desires as whilst you may want more money now, please be aware that by taking the maximum now, depending on what happens to house prices you may not be able to release further money in the future to help meet ongoing income or care needs.

Your property must be maintained by you and kept in a reasonable state of repair.

You will have to the scheme providers permission should you require anyone to live with you in the future should they not be a co –owner of the property.

You will not be permitted to take any other loans to be secured on the property.

“Equity release” includes home reversions plans and lifetime mortgages. To understand the features and risks ask for a personalised illustration.