Pros and Cons

equity release pros and cons

 

Impartial equity release advice is essential, so equity release pros and cons must be explained.

Aswell as the benefits of equity release, as an advisory service we feel duty bound to point out
any negative aspects of lifetime mortgages & home reversion plans. We pride ourself on offering
impartial & independent equity release advice from qualified equity release advisers. Therefore,
we’ll endeavour to paint the whole picture, to enable you to make an informed decision.

 

Equity Release Pros and Cons

will help dispell any myths surrounding the advantages and disadvantages of equity release mortgages. After
working your whole life building your retirement nest egg, you now should be able to retire & relax & enjoy the
fruits of your labour. Compare Equity Release help you judge for yourself whether equity release is right for you.

 

Equity Release Pros

  • Provides tax free cash or income – equity release helps support you financially throughout
    retirement, enabling you to spend the proceeds on anything to make life that 'little more enjoyable'.
  • No monthly payments are required - most lifetime mortgages & all home reversion plans have little
    impact on your budget, as the lenders require no monthly payments towards the interest charged.
  • Right to remain in your home - under ERC rules this feature enables you live in your home rent free
    for the rest of your life. This will be either until the last person has died or moved into long term care.
  • A no-negative equity guarantee - provides the assurance that no matter what, with roll-up equity
    release schemes, you can never end up owing more than the value of the property.
  • Highly regulated financial products - the industry trade body ERC sets equity release standards and
    the FCA regulates. Lifetime mortgage & home reversion schemes have utmost consumer protection.

 

Equity Release Cons

  • Reduces the value of your estate - a release of equity effectively takes cash out of your property
    lowering its net asset value. This reduces any inheritance you intend passing onto your beneficiaries.
  • May affect social security benefits - if the proceeds from a UK equity release are used to increase
    savings, then means tested benefits such as pension credit & council tax benefit could be reduced.
  • Early Repayment Charges - in principle, equity release schemes are designed to run for the rest of
    your life. Should early repayment arise, then substantial penalties could be charged by the lender.
  • Expensive set up costs - a combination of the valuation fee, application fee, solicitors fee & advice
    fee can all reduce the final amount you receive. Always shop around for the best equity release deals.
  • Difficulty remortgaging - upon completing a lifetime mortgage or home reversion, you have secured
    a loan on your property. This may restrict your options to raise additional finance moving forward.

 

The information above relates to generic equity release advantages & disadvantages. Different types of equity release schemes have their own individual pros and cons & are discussed under the relevant product sections.

 

 

For more key information in relation to releasing equity on these lifetime mortgage plans please visit: -

roll-up lifetime mortgage, fixed repayment lifetime mortgage, drawdown lifetime mortgage,

interest only lifetime mortgage & the home income plan

 

 

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These are lifetime mortgage & home reversion plans. To understand the risk & features of these plans, request a personalised Key Facts Illustration.

CompareEquityRelease.com helps you to compare and arrange equity release schemes with the following equity release companies:

Aviva | Bridgewater | Hodge Lifetime | Just Retirement | LV= | more2life | One Family | Retirement Advantage | Pure Retirement