For those entering retirement, it can be quite an adjustment getting used to a drop in income. Wanting to retire in comfort might not be as easy as you’d hoped. Homeowners can find themselves rich in assets but not in available cash, which is why many choose to release some equity in their homes. Here are some of the many reasons why those in retirement might wish to enter into an equity release plan:
Some people consider downsizing as a way to free up some cash, but for many this is not something they really want to do. Whether they prefer to stay in the family home or just don’t want the stress of moving house. Equity release means you get to stay in your home but still unlock some of the wealth locked in it.
Equity release can also be used as a means to repay outstanding mortgages or other debts. This is normally the case with interest-only mortgages when the homeowners haven’t saved enough to pay back the capital. Perhaps savings haven’t performed as well as they had hoped and there’s not enough to clear the mortgage. For a specialist in Equity Release Marlborough, contact Chilvester.
Perhaps you want to invest some money into the upkeep and modernisation of your property. Finding a large sum of cash in retirement for such plans isn’t easy, so many turn to Equity Release Marlborough schemes to help. The money can also be used to help children or friends with financial assistance. Figures suggest that around one in five homeowners uses the money for this reason.
Of course, it’s not just large purchases that equity release can be used for. For those struggling with a substantial reduction in their monthly income, equity release plans can provide money in stages for a little top-up when you need it most. The interest is only charged on the funds you withdraw at any one time which helps to keep costs down.
Many people might be currently tempted to enter an equity release scheme. They are normally several percentage points higher than standard mortgage rates but have recently fallen to attractive lows. It’s important to bear in mind though that the interest charged by equity release plans does roll-up and is compounded so the amount that interest is charged on will get bigger over time.