Equity Release Solutions: Is It the Best Choice For Your Retirement?
What is equity release and how does equity release work? Equity release is the process of releasing some or all of your property’s value to help you pay for care. A person has equity in their home if they have paid off the mortgage on it, or if they are not liable for any money owed on the property. The equity in a property can be used by a person to pay someone else to look after them. Equity release lets people provide funds from their own assets without having to sell anything.
When people need care in the home, they often sell their property to pay for it. This means that when you go into a care home, your money has been spent already and cannot be used again. Equity release allows you to use your own property’s value instead of selling it or taking out loans from banks so that there is still some protection against losing everything if things don’t work out as planned.
The equity release process begins with a person applying for an equity release plan. The individual will need to qualify for the scheme, which requires that they have sufficient income and assets as well as basic health requirements. Those who are eligible will be assessed by an actuary in order to determine how much can be borrowed against their property’s value without putting it at risk of going into negative equity. Depending on the borrower’s needs, this could range from 25% up to 100%. Once approved, the money is then paid out over time rather than all upfront so there is no danger of running out before you die or sell your home again to pay back what has been taken from its worth. Equity release offers people peace-of-mind when considering care options.