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Pros and Cons to Consider When You Compare Equity Release Deals

Compare Equity Release

Last updated on 27 June 2023

You probably already know that the equity release UK market is not as straight forward as other financial products. Indeed, this is one of the main reasons why many people may choose to steer clear from such plans in the first instance. However, if you are stopping yourself from getting online to compare equity release deals because you simply feel too intimidated by the whole concept, make sure you undertake a little research to ascertain if such a plan could be right for you. That vital research process will start right here as we discuss some of the pros and cons that are relevant to equity release plans.

The Pros of Equity Release

Obviously, the main pro is the very fact that a huge chunk of the equity that is tied up in your property can be released to you at a time that you would most appreciate it. This can be forwarded to you as either a one-off lump sum or it can be taken as an additional income over time, by way of instalments.

The equity release UK market has never been better regulated than it is today and this is primarily thanks to the organisation known as SHIP (Safe Home Income Plans). This regulatory organisation exists to ensure best practice within the industry, and if you compare equity release plans through a company that is affiliated with SHIP, this should give you some extra peace of mind.

There are even guarantees that can be taken out that will ensure that you do not end up paying more interest than the equity that will eventually be left in the property when you die or move into fulltime care; furthermore, there are even guarantees available that can ensure your loved ones are left a set amount of money: as agreed at the commencement of the plan. These options provide further peace of mind by way of the no negative equity guarantee and the inheritance protection feature of a lifetime mortgage.

Some equity release plans will even allow you to move house and this means that you do not have to be tied to your property for the rest of your life, just because you have secured a lifetime mortgage or home reversion plan against it. There are certain criteria that need to be satisfied for this, so be sure to check with the company you have the equity release product with first.

The Cons of Equity Release

The main con is the very fact that most people feel intimidated by the concept and privacy of equity release products. But to be fair, this is not really the fault of the industry itself; rather lack of knowledge amongst the general public. If you admit to knowing very little about equity release plans, the onus is upon you to find out more and compare equity release deals to ascertain if they are right for you.

Another con is that you will always have less to leave your loved ones when the equity release plan is paid back. However, it would be nice to think that most relatives nowadays are far more self-sufficient when it comes to relying on the inheritance of an estate. We no longer live in Victorian times when such a sum of money could mean the difference between life and death itself. Many people, if they genuinely care for the relative in question here, would much rather see them enjoy the autumn of their lives.

Equity release plans are such a long-term commitment; hence the correct term for these plans being named lifetime mortgage schemes. This is certainly true, but when a plan is drawn up correctly and in full agreement between the two parties involved, over a very short period of time, it is forgotten about very easily and you are left to live within your property as you would have been before such a plan was taken out. The only difference being that you will be tens of thousands of pounds plus richer.

So, hopefully this article has gone some way toward alleviating the anxiety that may be held with regard the equity release UK market. It is actually not as complicated as you may have first thought. Get online and compare equity release deals to find out if this is the type of financial assistance you have always been waiting for.

To find out which equity release lenders are offering the best interest rate, cashback or free valuations click here.

Alternative please call for advice on any of the details discussed above on 0800 028 3142 today.