Responsible Equity Release: Unlocking Cash in Your Home

A common situation that many are facing is subsisting on a limited pension and savings while they are living in their equity-rich properties. Whenever there is money that is tied up in your property and not in your pocket so you can use it, it can be very frustrating. But the right equity release plan could be the perfect solution to remedying your financial situation and getting some extra cash into your pocket.

There are many reasons why a person would want a responsible equity release from his or her property. Maybe improvements need to be made on the home or he or she needs to purchase a new car, go on vacation, or simply make himself or herself more financially comfortable. No matter the reason, an equity release plan is a great way to borrow money that is secured against your home’s value and have the debt be repaid from the sale of your home after you pass.

What Is an Equity Release Plan?

An equity release plan is a term that covers a variety of schemes that provide you with several options, one of which will be best suited to your individual personal situation. Some of the terms may include receiving a lump sum of money, having a regular drawdown, or, in some instances, even both. The benefits of the lump sum is that it can help you with whatever immediate plans you might have. The regular drawdown is something that can help you settle comfortably into retirement or even a new project.

Benefits of an Equity Release Plan

One of the biggest benefits of using cash that you already have in your home is that it’s tax-exempt. Any funds released through your primary residence through an equity release plan are classified as tax-free funds. This is good as it helps increase the amount that you will receive. But one thing to remember is that if you invest any of the funds from your equity release plan, taxes may be incurred on any financial gains.

Another great thing about equity release is that you get to keep living in your home through the entire period of the release plan. However, it’s important to know that you are still responsible for the upkeep and repair of your home throughout the duration of your equity release plan.

It may be quite beneficial to explore the other options out there prior to deciding that you would like to release some of the equity out of your home. One option would be downsizing to a more affordable property or even using your current savings and other investments.

Many have found that equity release is a great way of using readily available equity from their houses to help them live the lives that they want to live in retirement. It may be beneficial to look into the options available to you and contact a financial advisor to get all the details so you fully understand the pros and cons of getting involved with an equity release plan.

Post Author: Jennifer Slegg