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Building and protecting your wealth

Why Equity Release Needs Advice From a Specialist

Equity release can be an extremely useful tool in your financial planning toolkit. Your options consist of two main products – lifetime mortgages and home reversions. Equity release lets you access the equity from your home so you can use the money for things you need once you reach age 55 and you’re eligible to access the cash. The amount you have available depends on your age, the value of your home, and whether or not you have ongoing mortgage payments.

This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

Is Equity Release right for you?

Many people later on in life will look to equity release for help in their formative years. It might be the right fit for those that have invested in their property and know it holds value, but they also know that their pension and savings won’t be enough for them to continue their lifestyle after they retire or if they happen to fall ill.

Primarily, equity release could be right for you if you know you have wealth in your property and your pensions and savings are not sufficient to cover the lifestyle you would like in retirement, or need if your health deteriorates.

How to use Equity Release

  1. If you have high credit card balances or out of control payday loans without any clear strategy for paying down your debt, or if you’re worried about not being able to pay back your current mortgage (particularly interest only or endowment), an equity release product might be the option you’re after.
  2. You can also use the funds if you live on a fixed income that’s failing to provide any extra money for a rainy day or emergency fund, or even if you’re struggling to pay your everyday bills full stop.
  3. It can also benefit those looking to maintain or even improve their lifestyle. The money you receive can be used to buy a car, go on holiday, or even used to invest in your healthcare – either by purchasing private insurance or by putting the cash toward renovating your home to accommodate health issues.
  4. Of course, you don’t need to use the money on yourself, you can put it towards your family and their future. You could also use the funds to help your children or grandchildren purchase a home, get an education, or as an early inheritance gift for them to use however they please.

A few things to know about Equity Release

Loans are often more costly than ordinary mortgages because of the risk associated, which the bank then passes on to you. You’ll also need to think about arrangement fees, which differ based on your chosen plan and can range from anywhere between £1,500 and £3,000. You could also be in for early repayment charges that might be built into your loan, so check the terms.

Using the money from your home now does mean you’ll have less money later on when you might really need it. And the funds released may affect state benefits, so you need to check that the funds you receive won’t have an impact.

Don’t go it alone

Equity release products are often complicated and difficult to understand, and will more than likely require professional help if pursued. The market is quite niche and these products require a specialist’s knowledge to ensure you are fully aware of the features as well as the drawbacks of a lifetime mortgage or a home reversion.

You should seek out someone who has special qualifications for advice.

Our very own Darren Scott-Guinness has the necessary qualifications to advise on Equity Release and he’s happy to advise and help you build equity release into your overall financial plan, so get in touch today.

Looking to unlock your wealth?
Investments | Financial Planning | Retirement | Save Tax | Protection |

Dental & Medical Financial Services have been helping doctors and dentists to build and protect their wealth, whilst saving tax for over 25 years.
Call Darren to discuss your options.

Tel: 01403 780 770


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