Are you about to engage in an equity release deal?
You’ve heard about it. You’ve read about the pros and cons. You’ve done your research and found about the different schemes available to you. You’ve hired an expert to help you out in the decision process, and heard their reccommendations. Now you’re strongly considering the possibility to closing up a deal with an equity release lender.
But have you truly compared all your options? Do you have a clear outlook of all the choices the market ofers? With equity release schemes increasing in popularity, more and more lenders are stepping into the market with new ideas and schemes. The more lenders there are, the more competitive the sector becomes, so the more they need to struggle to offer you the most convenient rates and the most interesting schemes. If you don’t do enough research and compare all your options, there is a chance that you might be missing an opportunity to engage in a more convenient deal. And this is no small thing, because it’s about your future, your retirement and your finances. You could save up to thousands of pounds, avoid unconvenient interest rates, and leave your family more inheritance if you pick the best lender and the best scheme.
So before you sign anything, make sure that you have thoroughly researched the equity release market and hired a reliable counselor who can put you into the right track. It’s worth the extra effort and the extra money!
Long term care or staying at home?
One of the most interesting aspects of equity release is that it allows you to stay at home instead of moving, but still access a lump sum or monthly income that relieves you from debt or bills, or enables you to spend more on yourself or your family, or whoever you wish. This is particularly important because other options, like moving to long term care or downsizing, don’t sond very good in some cases.
In example, your house might be just the right size for you, so downsizing would mean to lose comfort or the nice qualities of your current place – in example, a big yard or nice, luminous rooms. Also, and especially for elder people who’ve lived in a family home for decades, their house holds memories of happy times and they would, understandably, prefer to stay there until their final day, instead of being forced to walk away due to money issues.
Even if you need health assistance, you can compare nursing homes against living in the home with assistance, and when you pair that with the benefits of an equity release scheme, it suddenly sounds like a great alternative. After all, who pays for health care? Even if you might have some form of government assistance for health problems, it never sounds nice to burden your children or other family members with your health expenses.
Equity release scheme and rate comparison
There are many options for the release of equity of your property. You might have heard terms like lifetime mortgage, home reversion, interest only schemes and drowdown mortgages. You should learn about each one of them and compare their pros and cons in order to find out which one is most convenient for you. The point here is, no scheme is technically better than the others. They’re all different, so in each case any of them can help you make the most of your assets. It will depend on factors like your age, the value of your property and your health.
There are many tools available for you to compare equity share schemes, and perhaps the best known of them is the equity release calculator, that you can find at many places online, for free access. Some equity release providers offer a free online calculator service at their own website, which also serves as a tool for quotations. However, you must use these services carefully, and for two reasons.
One of them is that different calculators might give you different results, depending on the criteria and rates used for the math. In other words, if you want to get an idea on how much you could get out of an equity release deal, use several calculators and gather an average of their results.
The second reason is that in some special cases rates might vary from the result shown in a dealer’s free calculator, so the first result is always estimative and aproximate. You need to confirm it by talking to the lender.
Different schemes have their own cash flow and interest dynamics, so do some deeper research or, even better, hire an expert to help you compare your options.