There are numerous reasons why aging homeowners would want to release property wealth.
Whether it’s to boost the pension pot, help your children (or grandchildren) afford their first home or simply free up some money to buy that dream car you’ve always wanted, equity release mortgages have come to represent a viable route in which homeowners can convert bricks and mortar into ready cash.
Furthermore, thanks to the proliferation of equity release mortgage deals over the last few years, it’s also an easy and cost efficient route, too.
According to the Equity Release Council – a trade body that represents the equity release mortgage sector and promotes high standards of conduct and practice in the provision of and advice on equity release – a staggering £1.85billion in housing wealth was released in the first half of 2019.
And this growing popularity is also helping to drive down equity release mortgage rates, too, with some lifetime mortgage rates coming in at under 3 per cent. In summary, going down the equity release route is now a very easy process to carry out.
If you’re about to apply for an equity release mortgage and would like to know more about how they work, then read our guide to equity release mortgages. Similarly, read the top tips on equity release mortgages to get Complete Mortgages’ take on what you should be considering before you start the process.
However, as easy as it is to get an equity release mortgage, there are a few things to consider:
1. Borrow in stages
Regardless of the amount you agree to free up via equity release, don’t take it all in one go (if you can help it). After all, as soon as you borrow, interest – and the effects of compound interest – quickly begins to have an effect. If you think £20,000 can cover you for 10 years, just take that and wait before taking the next sum. There’s little point paying interest on money you don’t need.
2. Quality counts
As mentioned previously, the Equity Release Council exists to promote high standards and uphold quality. So, make sure that when it comes to applying for equity release, you use a company that is a member of the Equity Release Council.
3. For your benefit…
Check your benefits status. If you’re entitled to – or currently receiving – benefits, a significant injection of cash (which is treated very differently to equity locked in a property) may change your benefits status. In fact, it could result in the reduction, or even the complete stoppage, of your benefits.
4. Get good mortgage advice
A good mortgage broker in Guildford, such as Complete Mortgages, will be able to help you make the right choice when it comes to equity release. There is a lot to consider when it comes to this type of mortgage, so speaking with an expert is an absolute essential from our perspective.
As an equity release mortgage specialist, let Complete Mortgages help you decide if equity release is the best way forward for you. Contact the team on 01483 238280 or email email@example.com.