Questions to Ask Yourself Before Opting for a Home Equity Release
A home equity release is not something many people plan going into their retirement.
It's actually more of a contingency, a disaster management scheme to keep yourself afloat.
And while it may leave much to be desired, a home equity release can often be the saving grace to many retired folks.
However, because it is such a big decision, you have to think from every single perspective before you choose to go ahead with it.
Here are some of the questions you should ask yourself: 1.
Have you chased up every other source of finance? This would include tracing any pensions you may be entitled to (the UK govt provides services for that) from previous jobs, as well as any benefits or aid that you could claim.
You could look at selling off investments and assets that you don't use or have become expensive to maintain - a second car, remote property, any collectibles or even things you may no longer use, like a golf set.
You can also look at any help you could get out of community funds or your family before looking up a home equity release.
2.
Have you considered creating an income from your house? A lot of people rent out a room or even a garage or attic and make close to 4500 pounds a year.
If you're not hard pressed for a home equity release, you could consider renting it to a relative, your children's friends or someone from the community.
You could also consider renting it part-time.
For instance a well-kept, spacious attic could be used by a budding artist as a studio.
3.
How attached are you to the house? Everyone is, to some extent, attached to their homes.
However, if at some point, you could see yourself moving out into long term care, you should consider home equity release.
But if you envisioned having your great-grandkids live in the house some-day, and if you believe that is practically possible, you may have to reconsider going through with it.
4.
What is the current market value of your house? If it is good, and the future looks promising; if your house is in a fairly robust condition and will require few repairs to last, a home equity release will serve you well.
This is because the house needs to be sold off at a sum higher than the loan amount, otherwise your beneficiaries have to pay the difference upon your death or when you move out.
At the same time, a house needing lots of repair and maintenance will cost you money even after the home equity release.
Once you have considered all of these options, it is good to sit down with a calculator and a computer to figure out what you could stand to get, and what are the offerings out there.
This you could do with a good website that will get you quotes from providers that match your requirements, so you don't have to.
It's actually more of a contingency, a disaster management scheme to keep yourself afloat.
And while it may leave much to be desired, a home equity release can often be the saving grace to many retired folks.
However, because it is such a big decision, you have to think from every single perspective before you choose to go ahead with it.
Here are some of the questions you should ask yourself: 1.
Have you chased up every other source of finance? This would include tracing any pensions you may be entitled to (the UK govt provides services for that) from previous jobs, as well as any benefits or aid that you could claim.
You could look at selling off investments and assets that you don't use or have become expensive to maintain - a second car, remote property, any collectibles or even things you may no longer use, like a golf set.
You can also look at any help you could get out of community funds or your family before looking up a home equity release.
2.
Have you considered creating an income from your house? A lot of people rent out a room or even a garage or attic and make close to 4500 pounds a year.
If you're not hard pressed for a home equity release, you could consider renting it to a relative, your children's friends or someone from the community.
You could also consider renting it part-time.
For instance a well-kept, spacious attic could be used by a budding artist as a studio.
3.
How attached are you to the house? Everyone is, to some extent, attached to their homes.
However, if at some point, you could see yourself moving out into long term care, you should consider home equity release.
But if you envisioned having your great-grandkids live in the house some-day, and if you believe that is practically possible, you may have to reconsider going through with it.
4.
What is the current market value of your house? If it is good, and the future looks promising; if your house is in a fairly robust condition and will require few repairs to last, a home equity release will serve you well.
This is because the house needs to be sold off at a sum higher than the loan amount, otherwise your beneficiaries have to pay the difference upon your death or when you move out.
At the same time, a house needing lots of repair and maintenance will cost you money even after the home equity release.
Once you have considered all of these options, it is good to sit down with a calculator and a computer to figure out what you could stand to get, and what are the offerings out there.
This you could do with a good website that will get you quotes from providers that match your requirements, so you don't have to.