The concept of equity release loans is quite simple. You borrow a certain amount of money, but you secure it with a property. You can decide the amount that you will borrow, which is usually a percentage of the total value of the property. Some people hesitate to get this loan due to the sky-high interest rates. The amount might keep increasing over the years. The creditor does not require you to pay the loan soon. However, for every year that you are alive, the creditor will add a high-interest rate. Since you use your property against the loan, you have no choice but to oblige. Despite that, it is still safe to say that this loan is fair.
When you receive the amount borrowed, you are getting it in full. You do not need to pay taxes, unlike other loans.
You can stay at home
Even if you already used your property against the loan, you do not need to leave any time soon. You can remain in your property until your death, or you need to go to a hospice care facility. You can even try home improvements that are suitable to your needs.
You can spend the borrowed money as you wish
Another benefit of this equity release loan is that you can decide how you are going to spend the money. Whether you use it to start a business or travel the world, it is your call. Since you do not need to pay it back any time soon, you will not worry about the repercussions of your decision. You can enjoy life since you already reached a stage when you do not need to worry about work. Your kids are also pretty stable, and you do not need to spend money on them.
There is no negative equity policy
Before, many people disliked the idea of equity release since the interest rates could be so high that when it was time to sell the property, the beneficiaries received nothing. Worse, they even needed to worry about how to pay the remaining loan balance. Now, with the implementation of the no negative equity policy, the beneficiaries do not need to worry even if the total loan is higher than the sale value of the property.
Given these reasons, it is fair to say that over 55 equity release is not a terrible idea. You also do not need to worry about the application process since it is not too difficult. You can wake up one day and decide to obtain this loan. As long as you show proof that you own the property and you already sought help from a valuation officer to determine the exact value, you can proceed with the loan application.
If you are unsure about this type of loan, you can always hire an equity release adviser to help you. The information you receive will make it easy to decide if the loan is worth pursuing or not.
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