09 February 2017

Equity Release Can Help You Spend Your Retirement Days in Peace

Sudden financial needs do not come with prior notices. But still you can combat it while you are working with your monthly salary or by taking a loan since you know you have the security of your salary to pay it back. But after you retire, it becomes a little difficult, especially if your pension amount is really small or if you do not receive pension at all. The only options left to you then is giving up all your savings or borrow money from friends and relatives or sell or mortgage your property. But neither of these above mentioned options is practical since you would have to think about your as well as your family's future. Another practical option is there though, equity release, and which would not only take care of your financial crisis but your future as well.
An equity release policy is much like mortgage in many aspects but it differs in the most important one making it a more practical option than mortgaging. Let me explain. When you opt for this policy, you are actually taking a loan against your property which is exactly like mortgaging. The difference is that you do not get to choose the amount of money you will receive as loan; it would solely depend on the valuation of your property. The biggest difference though lies in the fact that even if you cannot repay the loan you would not be asked to leave your property. You can call your property your own and also enjoy the loan amount for as long as you live. After your death the property will belong to the company from which you have taken the equity release loan. Another advantage of this policy is that though you cannot choose the amount of loan you can choose to receive loan amount in monthly instalments or as a lump sum amount depending on your needs and situation.
With all the above benefits, equity release has this one big disadvantage. You will not be able to leave anything for your beneficiaries since your property will belong to the lender company after your death. Then again with mortgage or selling too the same thing would have happened, only sooner. Hence it is better to opt for equity release and spend the rest of your life in peace without having to worry about money or the future of your family.