If you’ve owned your home for fifteen or more years, then there is probably quite a bit of equity built up in it. For people who are over the age of 55, they can gain access to the equity in their homes by taking a loan out against that equity. This is known as an equity release scheme. Here are five benefits of using equity release in order to get money you need or want to use.
Free Use of Money
Unlike many loans, you don’t have to reveal how you intend to use the money when you do an equity release. If you’re behind on some bills, need a new car or want to take a trip around the world, you are free to do so. No questions about how the money’s intended use will be asked, so you can do with it as you please.
The loan taken out on the equity of the house does not need to be repaid unless in the event that you need to be admitted to a long-term care facility, or you pass away. Then, when the house is sold, the equity release company, such as Responsible Equity Release, will get their repayment by claiming part of the proceeds. As long as the repayment doesn’t take all of the proceeds, you should still have money to pass on to your heirs.
Choose Payment Option
When you use an equity release scheme, you can choose to take the money out in one lump sum or you can set up monthly payments. This allows you to use the money as part of your retirement funds, or you can use it to pay off other debts. The equity release company will help you determine the amount of money you can get and then you can choose how you receive it.
Stay in Home
An equity release loan allows you to remain in your house, but still get the money you need from its equity. Since these schemes are for people fifty-five and older, being able to access the money that they need and stay in their own home is invaluable to them. That means they don’t have to start over again somewhere else or have to move in with their adult children.
Tax Free Money
The money coming from the equity of your house is tax free, so you don’t have to worry about the government placing claim on any of the money when the house is sold. After the house is sold, whether you’ve passed away or gone to live in a long-term care facility, the executor of your estate doesn’t need to worry about paying taxes on the loan. This leaves more money for your heirs, as long as the equity release company has gotten its money back from the proceeds of the sale.
Whether you need money to make repairs on the house in order to retain or improve its value or want to visit your children who live in another country, an equity release scheme can provide the funds that you need.