Is Equity Release A Good Idea For You?
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Pros and cons: Is equity release a good idea for you?
Eager to unlock wealth that’s built up in your property, but unsure whether it’s a good idea for you and your family?
With equity release, it’s essential you have a clear understanding of the potential benefits and pitfalls of your chosen scheme.
Fortunately, the experienced legal experts at Wilson Browne can help.
Below, we delve deeper into some of the potential pros and cons of equity release, including how safe it is and whether it’s the right route for you.
How safe is equity release?
Searching for a clear answer to ‘how safe is equity release’ before you explore your options?
Fortunately, equity-release schemes have high levels of safeguarding in place and must follow a strict code of conduct in order to protect consumer interests.
These strict regulations are set out by the Financial Conduct Authority (FCA) with the oversight of the Equity Release Council (ERC) and must be followed by all equity release scheme providers and advisors.
They can help to keep you safe as they state that you must receive financial and legal advice to release equity from your home.
This ensures you’re fully informed and properly protected while making this important decision.
Pros and cons of equity release
Like any loan arrangement, there’s likely to be both pros and cons, and equity release is no exception.
While the exact advantages and disadvantages will vary depending upon the type of equity release scheme you choose and your individual circumstances, our experts can give you an idea of what to expect.
To find out more about the potential legal pros and cons of equity release, don’t hesitate to contact our professional team and schedule your free initial consultation today.
What are the benefits of equity release?
Receive money to spend as you please
With the money you release from your home, you could make some much-needed home improvements, go on a holiday, pave the way for a more comfortable retirement, or financially support a child or grandchild through education.
This lump sum is tax-free
As equity release is a type of loan, it’s not taxable. This means it’s free of income tax and the money will only be taxable if you invest the money, for example, by putting it in a savings account.
Retain ownership of your home
In many cases, individuals that decide to release equity are keen to remain in their current home either for a significant period of time or until they pass away. With equity release, you don’t have to worry about the time, money, and stress of selling your beloved home to generate more money.
What are the pitfalls of equity release?
Your estate will be worth less
Equity release will affect how much your estate is worth as you’re essentially borrowing money from your estate. This loan, as well as any interest, must be paid off when you die, often through the sale of the property.
Could be more expensive in the long run
In some cases, equity release can be more expensive over time than simply downsizing to a more affordable property. Lifetime mortgages, for example, tend to have much higher interest rates than standard mortgage arrangements.
Early repayment charges (ERCs) may apply
Like most loans, equity release schemes are often subject to ERCs if you want to pay back the loan early. This can make equity release schemes more costly for those that are eager to repay the borrowed money.
Is equity release a good thing?
So, is equity release a good idea? Ultimately, equity release can be a viable option for many eligible individuals, but the answer to this question will largely depend on your specific circumstances.
It’s therefore vital that you seek expert financial and legal advice before committing to your desired equity release scheme.
Release equity with Wilson Browne Solicitors
If you’ve weighed up the potential pros and cons of equity release and still believe it’s the right route for you and your family, once you have taken the appropriate financial advice, then don’t hesitate to contact the equity release experts at Wilson Browne Solicitors.
We can help you to unlock the money tied up in your home through an equity release scheme, regardless of whether you opt for a home reversion plan or lifetime mortgage.
Offering fixed and transparent fees, direct access to your legal team, and expert advice regarding a wide variety of equity release schemes and lenders, we can help you to transform your equity into money with ease.
To find out more about our range of services or to discuss releasing equity with one of our experienced equity release solicitors, please feel free to either give us a call on 0800 088 6004 or submit your enquiry using our convenient online contact form.
From here, we can arrange your free initial consultation at your closest Wilson Browne Solicitors branch – we’ve opened offices in Leicester,Northampton, Corby, Kettering, Wellingborough, and Higham Ferrers and Rushden.
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Posted:
Jenny Woodruff
Partner
Jenny is a Partner and head of the Residential Conveyancing Team. She has extensive knowledge of the conveyancing process, including: dealing with freehold and leasehold sales & purchases; new build purchases; remortgages; transfers of equity; shared ownership; help to buy transactions & general property advice.