Equity Release Guide
With the huge rise in house prices in the UK and the measly state pension offered, many older people with little or no mortgage are using the capital in their houses to finance their retirement.
Equity release programs are a relatively new financial product and in our opinion are not the best way to extract money from your assets, but if you are on a low income or have no income whatsoever then they can be worth considering. They will use the capital from your home and own a portion of your property which they will then sell when you die or leave the property.
The principle is fairly simple: an equity release company will essentially buy all or part of your house from you and give you a cash sum either as a lump sum or monthly payments until you die or a combination of both. A lot of these programs are baffling and whilst it is possible to get a good deal, it is defiantly worth seeking professional financial advice before committing to such a program.
Most programs will allow you to keep part of the value of your home to give away in your estate when you die if that is your wish.
Such programs are not just for older people, in fact anyone on a low income who has a lot of capital tied up in their home could potentially benefit from an equity release program. Be aware though that as the risks these companies take are higher, so are their charges.