3 Things You Should Know About Equity Release

Oct 4 20180 comments


As you grow older, you may be in a dilemma in deciding whether to give up on your long-established property or to continue let it remain empty. It sometimes become a serious issue as the house lies unused and some couples do not understand how to raise beneficial value from their inheritance.

Equity release gives you access to a lump sum of money for your house that has high capital value, while you have it retained and intact. So you can go holidaying for a long trip or spend that money on house renovation.

The apprehension is in the fact that the income (money) provider must be repaid after the death of the homeowner.

So how can you deal with such a situation? Wondering how can equity release solve my problem even while I have to repay? You need a partner like responsibleequityrelease.co.uk to help you out.

Three Things to Know About Equity Release

Let us have a look at three important aspects of equity release.

1. It’s Some Good Tax Free Income

Equity release provides you with a huge and steady tax – free income for the rest of your life. Simultaneously, it also diminishes the amount of inheritance tax that is paid by your estate.

But this depends on your situation. Suppose you possess a small apartment, then equity release is not your solution as the amount you would get will neither be profitable nor sufficient.

Instead, you can use the equity release scheme against your house and reside rent-free in your own house by paying in instalments according to the time period decided.

2. You can Downsize Easily

The option of ‘downsize’ is trending today. Here, you mortgage your house for a standard amount and move to smaller sized home. Alongside it, if there is a fall in the interest rate, then you can also take the liberty to refinance your mortgage for a lower price with the help of other providers.

However, this is way too expensive than letting your property be sold to have your equity released.

Another significant factor is, once you have mortgaged the house, it sustains none of the value when you leave. The choice of a reversion of your inheritance will include difficulties in the process, or while even moving it to beneficiaries.

3. Helps You Get the Protection You Need

The NNEG (no negative equity guarantee) gives you protection in case there is a decline in the housing market. Also, if you plan to create a debt and add an ongoing interest to the amount you have borrowed, with NNEG you are assured that the future value will never become more than the interest you have added.

The Top Things to Note

It is mandatory that you plan to release the equity. If you intend to drop the scheme before the designated time, you might have to incur huge penalties.

Also, your qualification for specific state grants might be affected on the grounds of the mortgage.

The amount from the inheritance that you desire to entitle to your heir or even charity will decrease.

The value of your house can be substantiated by intense planning and approaching the correct equity release schemes’ advisor. Such a plan is mostly recommended for those above the age of 55 or retired men and women.


Oh, hello there!

Pam is an outdoors-loving millennial momma who loves to hike, trek and camp in the beaches and mountains with her partner and their kiddos. When not exploring the great outdoors, she works with bloggers, coaches and solopreneurs to free up their time so they can work on the things that they love and enjoy the most.