So many aspects of selling a home are uncomfortable, annoying and come at a price. When people are looking at downsizing their homes in order to provide some extra financial comfort over the current crisis, it would be an excellent idea to point out for those over the age of 55, that equity release could be a superior option.
Understanding the basics of ‘what is equity release’
Think of a normal residential mortgage, but where payment is deferred to a time when the house is sold or remortgaged by another person. It is basically pulling value out of the home and using it now, when it is needed most. Basically, this means that funds required to make it through the financial crisis can be secured now, when they are most needed. Eventually, the property can be sold and funds repaid to the lender, when the market is more buoyant and able to provide a good return once more.
For those who are looking at downsizing their properties in order to release some of the equity tied up within, this can be a much better option. Firstly, it is much speedier than waiting for any potential sale. The equity release application usually takes between 6-8 weeks. Also, any land taxes associated with property sales & purchases are not involved with an equity release remortgage: therefore no stamp duty or estate agents fees, or waiting for strangers to keep visiting your premises & commenting.
Can means tested benefits be affected by equity release?
The proceeds from a lifetime mortgage are free of tax as it is determined as a withdrawal of capital from your house. The one important point to bear in mind is receipt of state benefits.
In particular any means tested benefits such as pension credit or council tax benefit may be affected if taking equity release & leaving these savings in a deposit or current account. The less you want by the release of equity from your property is to have found that you have lost out financially elsewhere. Your objective of financial bliss would have been shattered by a simple overlook.
Best equity release schemes
Equity release makes retirement planning much easier. Endeavour to discuss your options with an expert financial advisor who will research the best equity release schemes for you. Shop around first if confident enough and use the various equity release calculators that are available to help in understanding what potential cash lump sums are available.
Equity release is a simple enough method of obtaining equity from your property. It means that additional funds can be released from the property relatively easily, and much faster than with selling a house. It means all the painful transactional problems that come with moving house is potentially avoided. It means that the additional funds can be arranged to be provided in a way which meets your needs & anyone else over the age of 55.
If you have means tested benefits currently and wish for a free assessment as to whether equity release can affect these benefits call the Equity Release 2go team on Freephone 0800 321 3156.