Once retired equity release can help you fund those desperately needed home improvements. Many retirees really struggle to get by everyday let alone fund some really expensive repairs to their property. Equity release can provide this much need cash to allow more home comforts in retirement.
Before you do consider equity release to fund home improvements there are some advantages and disadvantages to consider.
Advantages of Equity Release
There are many advantages of equity release, here are a few.
- It can provide a lump-sum payment which is tax-free or it can provide you with a regular income. You can if you wish have a combination of both.
- You could raise tax free cash and buy a purchase life annuity with the proceeds to provide an income for the rest of your life.
- There is No Negative Equity Guarantee built into all the equity release providers that are part of SHIP (Safe Home Income Plans) this protects the borrower in the event of a downturn in the housing market.
Disadvantages of Equity Release
- It may decrease the amount of money your family will inherit upon your death – assuming the value of the property grows at a slower pace than the interest rate on the mortgage.
- It may reduce the amount that you can bequeath to charity.
- In the UK, it may impact any means tested benefits that the borrower may be entitled to.
If you do think that equity release could help you fund some much needed home improvements and you feel that the advantages outweigh the disadvantages then consult with an independent equity release specialist.
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