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If you are over 55 years old and have a low income yet own your own home it may be possible to consider equity release, however it is a big decision. There are many equity release schemes available but it is important to get professional advice and consider various schemes carefully rather than taking the first one offered. With equity release, you are able to release cash from your home without needing to sell your home, move out or even pay the money back. So if you feel you are struggling then it can be a sensible way of helping you out during retirement.
If you opt for a lifetime mortgage, the money you borrow depends on the value of your home as well as your age. A home reversion scheme allows you to sell part of your property but if you sell your home, you can only take the profit from your share. With a lifetime mortgage you will benefit from owning your property outright, however it is important to note that a home reversion scheme means you will have to hand over the deeds to your property as the provider will own part of your home, and you will own a lifetime lease.
Generally speaking you will be able to remain in your property for the duration of your lifetime, but there are conditions such as keeping your home in a good state of repair. If you fail to maintain any of the conditions the provider could take action and force you to vacate your home. Although equity release has the benefits of releasing cash from your assets, when you die or have to move into a care home, the provider will then sell your property and keep their share, whether that be all or part of the selling price. This means that your family or friends cannot inherit your property or money from the sale of your home after your death.
You will also have to be careful with any money you receive from equity release as once it’s gone, you may have no means to pay for care in older age or other expenses. You also need to be extremely careful that you find a reputable equity release provider as unfortunately there are many who take advantage of older people and convince them to take a lower price for your home. Therefore it is important to get financial advice from a professional who deals in equity release or a solicitor if you are considering this option. There are also other options available however, such as a quick home sale, which will enable you to sell your home without any hassle or lengthy processes, and in some cases you may be able to stay in your property.
If you enter into an equity release plan but later change your mind and decide to move house, you will usually need to find an alternative property that meets the requirements of the provider and also a property of lower value. Ensure you are aware of every eventuality prior to making a commitment.
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