Uses Of Equity Release
Equity release schemes have the potential to unlock a tax-free lump sum from the value of a homeowner’s property to supplement income in retirement. However, what are the most common uses for releasing equity from your home?Do you want to learn more? Visit equity release .
Because these particular schemes unlock a lump sum – in most instances – homeowners generally use the money to make one-off purchases or transactions. Below are some of the most popular reasons for releasing equity.
Mounting debt can have a major impact on a household, especially after retirement. Managing the monthly repayments with added interest can take a considerable amount out of a retired homeowner’s pension, or savings put aside for retirement.
By releasing equity, a homeowner can clear any outstanding debt, freeing themselves from large monthly repayments and allowing them to enjoy the income and money they have.
-Paying Off the Mortgage
Much like clearing debt, paying off the mortgage using a release scheme can ease the burden of having to make monthly payments. It might seem strange using the existing equity in your property to pay for the rest but – in the case of lifetime mortgages – you will continue to own 100% of the property.
Enjoying retirement is important – after all this is what you have worked for your whole life. This is why some homeowners release equity so that they can afford a lifestyle that they want. This might include numerous holidays, regular purchases and the freedom to do what one wants.
-One-Off Luxury Purchase
Paying for that once-in-a-lifetime holiday or buying a new car is very popular for homeowners wanting to treat themselves using an equity release scheme.
-Help Family Members
Another use of equity release schemes is for parents to help their family out. One of the most common reasons for this is helping their adult children get on the property ladder. This has become more pertinent in light of the recent economic climate.