Cash in on your Property's Value with Home Equity Release
Are you approaching retirement age? Worried your pension won't give you enough to live on and that your savings, if you have any, aren't going to stretch?
If so, you are not alone because every year thousands of people retire with these concerns on their minds. These days, pensions don't go very far and with interest rates so low, savings don't either. So what's the answer?
A home reversion plan or lifetime mortgage involves releasing cash from your property: cash that's been effectively ‘saved' up over the years as you've worked hard to pay your mortgage.
Depending on your property value and your age, which needs to be a minimum of 55, you could well be eligible to release several thousands of pounds, and that's in tax free cash. You could use it to top up your pension so you're more comfortably off each month or you can take the lump sum and splash out on doing up your home, perhaps leaving a bit aside as a rainy day fund. Some people use the money to pay off their remaining mortgage so they have more money to spend every month.
So, if your pension isn't going to be enough to live on when you stop working, and your savings would quickly dwindle if you were to rely on them too heavily, seek specialist advice on home equity release. Think about it, it's basically like a savings plan that you've been paying into over the years, and now it's time to cash in!
Equity release may involve a lifetime mortgage or home reversion plan. To understand the features and risks, please ask for a personalised illustration.
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Making the right financial decisions as you approach retirement can have a dramatic effect on your future. Some plan for retirement for many years, others don't give it any real thought and then when the day comes to stop working, they suddenly realise just how hard it can be to get by if a minimal pension is the only income available.
Chatham House, the world- leading institute for the debate and analysis of international issues, has recently published a report which reveals a bleak outlook for future pensioners. The organisation looked at how people save for retirement and at predicted income in retirement up to 2050. And they found that households with incomes of £18,000-£44,000, ‘middle income households' as they called them, will experience an income drop of 60% when and if they stop working.
Homeowners looking for funding options to help them through retirement are increasingly turning to equity release. Seeking the best independent financial advice in retirement is vitally important, and the key to knowing if you have located the best equity release specialist is finding out the level of detail they go into with their advice process.
Many homeowners facing repossession turn to Sale and Rent Back (SARB) so they can relieve themselves of debt and stay in their homes as tenants. However, there are no guarantees that they will have lifetime residency and in fact, some tenancy agreements only run for six months, as was recently documented in The Times on Saturday. An alternative for those over 55 that does guarantee lifetime residency, however, is a SHIP lifetime mortgage or home reversion plan.
Regular exercise, a healthy diet and getting away from the stresses of everyday life all form a recipe for feeling good. A balanced diet of fresh, unprocessed food; regular trips to the gym; a good dose of leisure pursuits; some fresh air; regular breaks: everything you should be doing to feel good and live longer. And with equity release this can be possible....
Several reports this week have signalled the fact that equity release is becoming more popular than ever and that retirees of the future are more likely than ever to look into house equity release. Changes to pensions, retirement ages and a struggling economy all point to these predictions becoming true. But clear information and guidance on equity release must be presented for homeowners to fully understand the ins and outs of home reversion plans and lifetime mortgages.
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A new ‘enhanced lifetime mortgage' recently introduced onto the equity release market makes it possible for homeowners with health issues to release more cash. The product has been designed for over 60s suffering from ill health whose life expectancy is likely to be reduced as a result. A "significantly" larger lump sum can often be released compared to the amount offered by a lender who doesn't take health into consideration.
The Dilnot Commission has, unsurprisingly, attracted much media attention and comments from Andrea Rosario of Safe Home Income Plans (SHIP) and Claire Barker from the Equity Release Solicitor's Alliance (ERSA) back the industry's consensus that the government needs to be doing something to highlight the benefits of Equity Release as a viable retirement funding option.
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