Equity Release is it a good idea?

Question

We're considering this option to release some money in about 5 yrs time, ive heard a lot of bad stuff about it, has anyone had a positive experience with this?

Answer 1

If you have loads of equity and need the money it is OK. But it is an expensive way of getting money.

Answer 2

Equity release is a good idea if -

it means you can live on your current income without debts

There is sufficient equity in your property and its likely to remain that way

You choose the method of release which best suits your plans eg mortgage style release may not be good if you plan to stay put for the next 40 years

you go to a reputable provider who will do what is best for you rather than what brings in fees for them

You dont have future plans for your equity eg deposit on the next home.

The FSA should be able to give you a list of reputable providers.

Answer 3

"Equity release" is a euphemistic way of saying "getting into debt".

If you're happy with debt secured on your home, then go ahead. Personally I've paid off my mortgages as fast as I can; they're a millstone and stop you from building up savings.

Answer 4

Hello

Very simple answer.

Yes but.

Don't over release to avoid being in negative equity. (if your property fall in price).

Release enough to invest. For example, buy a property in Bulgaria, wait...and sell...

This is a clever way of releasing equity.

If you release equity to pay off debt...and get into more debt...then...it might not be a good idea.

Answer 5

Just bear in mind that what you are really doing, is selling your house for much less than it is worth.

You don't give your ages but you have to remember that the interest is compound, and may relatively quickly overcome the value of your property, when added to the amount released.

If you have no heirs, or if they do not care about inheriting, then this may be a good idea.  If you do have prospective heirs, I would suggest that you discuss it with them before you do anything.  Maybe selling to them at a "giveaway" price would have the same effect as equity release, except that they inherit the full value of your property - unless, of course, you are inconsiderate enopugh to die before seven years or so, and they are then landed with a large bill from the  Inland Revenue!!

Answer 6

Well i believe its good...but it depends on few things...as to 1st understand it well & see the future perspective about it in the long run.

Equity Release schemes give older homeowners a way to turn some of the value of their homes into a cash lump sum or regular income. Whether this is for a new car, home improvements, a holiday, to pay off existing debts or simply to improve living standards, Equity Release schemes are designed to unlock the wealth that is tied up in your home.

There are two types of Equity Release Scheme:

Lifetime Mortgages

Home Reversion Plans