If you’re over 55 and need a cash injection, then an equity release mortgage could be a viable strategy for you. Whether you want to make home improvements, repay debts, travel the world or increase your income, equity release can securely provide you with the funds you need to achieve this. Below, we explore what equity release is and what you might use it for.
What is an equity release?
Equity release is a process used by mostly older homeowners to receive a cash injection. This works by turning the equity in your home into tax-free money. There are two main ways of achieving this. Firstly, there’s a lifetime mortgage: this is where you borrow against the value of your home, while retaining ownership of the home. This loan will be repaid after your death through the sale of the property. Secondly, there’s the option of a home reversion plan, although this is less popular. This is where you transfer ownership of your home for a below market value fee, in return for the right to live in the property rent-free. Both options can open up finances for different projects.
One popular way people use their equity release is by making home improvements. If you’ve been considering a significant home improvement, then equity release can help you achieve this. Whether you want to build an extension on your home, build a conservatory, revamp your kitchen or just redecorate your home, this is a useful way of funding it. Plus, this investment can also increase the value of your home, making it especially worthwhile.
Repaying mortgages and debts
If you need help repaying your mortgage or debts, then equity release can help too. This can help you make inroads into your debts and lower your rate of interest. Lowering your monthly debt payments can lower your stress making it worthwhile.
As you approach later life, you might find you have more time for holidays – especially if you’ve retired. And by utilising an equity release, you can give yourself the funding to allow yourself to make the most of this time by travelling the world.
Increasing your income
Sometimes, the reason for equity is as simple as increasing your income. By getting an equity release, you can give yourself plenty of disposable income, allowing you to live a more expensive and comfortable lifestyle.
An equity release can be an effective way of unlocking extra funds. And by spending that money on any of the ideas above, you can enjoy the full benefits of securing an equity release.