Equity Release Companies: Scam Or Not?
There have been many companies that have begun to offer equity releases to retirees.
Our experts have found that the top 10 equity release companies have made it foolproof for customers to get scammed and ensure property and release plans are in the right hands.
Are those options safe? Let’s take a look.
Is Equity Release A Scam Or Rip-off?
No, equity release is not a scam or a rip-off. According to our equity release expert, Jason Stubbs, equity release has many lucrative advantages. You can pay for education, a holiday or pay off old debt. There are no limits to how you can spend your money.
What Is the Difference Between Equity Release And A Lifetime Mortgage?
An equity release is money released from your home, which weakens your property value and decreases the amount of money your beneficiaries receive once the property is sold to recover the costs. A lifetime mortgage allows you to live in the home until you die, and your beneficiaries can decide to sell the property on their own or pay back the money with other financial means.
Are You Interested In Equity Release But Concerned About Value For Money?
If you are concerned about equity release or value for money, it is good to note that the amount you get for your equity release plan is lower than what you would have received on the open market. There are also interest rates between 3 - 7% attached for life. If you want to avoid high costs and choose the wrong lender, you could be stuck.
How Do I Know If Equity Release Is Right for Me?
You will know that an equity release is suitable for you if you have your home evaluated and agree to the amount you will get. If you are happy with the outcome of your evaluation and the means to get equity fits your standards to your lifestyle, then you can manage both.
If you need to cover the outstanding debt that has become too high or cannot afford to take care of yourself independently but have a home worth equity release, then it is right for you.
Where Can I Get High-Quality Equity Release Advice?
Fact Find is a great way to determine if you should release equity from your home. It will give you an idea of what you may need the money for and if you could do without an equity release mortgage. Financial advisors also help you understand if you need to release equity to cover any outstanding costs or just need a better lifestyle plan.
What Are The Risks and Pitfalls Of Equity Release?
The risk in equity release is that you will get a smaller amount paid than you would have received if you had sold your house on the open market. Your beneficiaries stand a chance to lose their inheritance if you default on your repayments. You will have to pay whatever the interest rate is for the rest of your life.
Common Equity Release Questions
1. What Is Fact Find For Equity Release?
Fact find is advice on equity release, lifetime mortgages, retirements, and much more. It is a way to get clarity on taking out equity releases before deciding to go through with it.
2. What Do I Need To Qualify For Equity Release?
To qualify for equity release, you will have to do the following:
- Have a good credit record
- Be a resident of the UK
- Be 55 or older
- Have the property in your name
Although equity release is not a scam, it is still advisable for you to seek financial advice about your choice to release equity.
You want to make sure that you can repay the money and that your family is aware of the risks that you are taking. They may stand to lose their inheritance if you opt for a home reversion plan and may stick with the repayments if you choose a lifetime mortgage. Either way, it is better to seek advice and to be sure before releasing equity.