Equity Release is like a financial Swiss Army knife — versatile and handy for various situations. While you make your own notes about, “what can an Equity Release be used for,” here are the top five reasons that homeowners turn to this flexible financial tool.
1. Repaying existing mortgages, credit cards and other debt.
Many find that as retirement dawns, the weight of a mortgage or credit card debt bears heavy on a reduction of income that retirement often brings. Equity Release allows retirees to repay these debts and take control of their monthly budget. They can choose, within certain limits, how much they want to pay per month and even choose to pay nothing at all if they want. If they want to pay something every now and again, that’s possible too. The important thing is that they can organise their finances to fit their lifestyle.
Statistics speak:
- A third of mortgage holders may still have it at age 65 and beyond.
- 9% worry the mortgage might outlive them.
- 1.5 million retirees are still making mortgage payments.
2. Family first: boosting the next generation
That heartfelt desire to give the kids or grandkids a leg-up in this world is another driving force. Whether it’s aiding with a deposit on a new home or covering those critical moving costs, a modest amount from Equity Release can yield priceless satisfaction.
Family finance fact:
- A £30,000 lift from Equity Release can unlock doors to a £250,000 family home by providing a 10% deposit and money towards the costs of buying.
3. Lifestyle lift: from home improvements to holidays
Whether it’s sprucing up your home or cruising to new destinations, Equity Release can, and does, fund those dreams. It’s not just about indulgence; it’s strategic, too. Think fewer repairs down the road or swapping out the old car to avoid future mechanic bills. You can even create a reserve so that the money is there when you need it.
4. Going private: funding timely treatments
With age, the importance of health comes into sharper focus. Equity Release can be the answer for prompt medical care.
5. Switching it up: finding a better deal
Surprisingly, switching Equity Release providers can be a savvy financial move. It’s not a step to take lightly, though. Always involve a professional adviser to navigate fees, penalties, and to search the whole of the market for a deal that will suit your current needs
The bottom line
Each of these reasons for Equity Release highlights the flexibility it offers. It’s a financial instrument that adapts to your life’s needs and aspirations. Yet, as versatile as it is, it requires a deep dive into the details with an independent adviser to make sure it’s the right move for you.
