Is Equity Release a Good Strategy to Consider?

Equity Release (ER) is one of the most common ways people get a lump sum of money once they’ve reached retirement age. It’s a way of getting around the problem of being dependent on the state pension, which doesn’t pay enough to live on. Once you’ve paid off the mortgage and other debts and have enough to live on, most people would rather have their lump sum than be dependent on the state pension.

If you consider making a change to your lifestyle, it is always good to ask yourself why you are doing it and what the benefits are. If you are simply making it because you want to, but you have no long-term plan or strategy, then you are likely to end up disappointed. But if you are changing for the right reasons, such as shifting to adult living (if interested, check out the senior living community in Brick, NJ) or starting a new business, you are likely to find that your lifestyle change will be a success and you will be happy in your new life.

Equity release is one of the strategies that you can consider if you want to move home, if you’re going to downsize, or if you want to extend the life of your current home(s) without having to move again. It is also a strategy that can save you money on the back end.

Here are Five Compelling Strategies to Consider:

Sustainability

Equity release is an extremely sustainable method of financing your retirement.

Flexibility

Equity release allows you to buy what you need when you need it.

Secured benefits

It’s important to ensure your retirement is secure and protected. With equity release, you can purchase a package of benefits, which the state will replace if you pass away.

Control

You can choose which benefits you would like included in the package.

Cost

It is the most cost-effective method of financing your retirement.

Equity release can be a handy way to make sure you won’t have to pay any more on the house than you do at the moment, but it is a high-risk option that should only be used by well-funded people who can afford the upfront cost.

5 Reasons Why You Should Consider Equity Release

If you’re thinking about buying an Equity Release (ER) product, these are the reasons you should think about.

  1. It might be your best option
  2. You’ll get the best return possible
  3. It’s suitable for almost everyone
  4. You won’t pay a hefty premium
  5. You can buy or sell your home as often as you like

When you think about it, buying your home can be a great way to raise the value of your equity. But does it make sense for you to buy your home through an equity release scheme? Commonly, it is only for the less well. However, anyone can benefit from the scheme.

Is Equity Release Worth Considering?

At a glance, it may sound like a good idea – you’ve saved up some money and paid off your mortgage, and you have enough left over to enjoy a bit of financial freedom. What’s not to like? In reality, a home equity release is a risky financial move and should only be considered if you can afford it and handle the consequences.

Everyone wants to get the best deal when they sell their home, and equity release, or the sale of the home with the right to repurchase the house at a later date, is a popular option. You sell it and, in exchange, you get a lump sum from the vendor via a cheque that can be cashed in through the post, or you get a stream of income from a guaranteed monthly payment for a set number of years, with the eventual possibility of a lump sum payment at the end of the contract.

Equity release has been around for some time, but there has been a huge growth in the product’s popularity in the last decade or so. There are now a host of providers offering their own versions of the product. This has led to some confusion, and it is hard to know what to believe when considering this type of finance.

Most people don’t think about equity release when it comes to superannuation (or insurance, as some people call it). The good news is, when you do, it can be a very smart way to pay for your retirement.