Equity release: The Pros and Cons
Are you considering equity release? Then, know the pros and cons before you make a crucial decision
13:08 19 March 2013
Equity release can be a good option for homeowners who are 55 years old and above to get access to their money through their homes. However, just like any other options, equity release has its own pros and cons.
- Equity release will provide the borrower with substantial amount of cash available either as regular icome or as lump sum.
- Equity release is available to eligible borrowers without huge charges until the home is sold.
- Borrowers can still live in their house for as long as they wish.
- Borrowers are given an option to take more cash later on (depending on how much you take now).
- This option, although will give you quick access to your wealth, will reduce the value of your estate.
- Equity release can be more expensive in the long term compared to just downsizing to smaller property.
- This option may affect your entitlement to means-tested benefits and grants.
- The amount owed on the loan can increase quickly.
- Equity release limits your options for moving house in the future.