Pension insufficient to live on – Equity Release Could be Your Solution

If you are one of the many thousands of people over the age of 55 trying to make ends meet, but with insufficient income, an Equity Release Lifetime Mortgage could be the answer to your predicament, and may be the solution to provide that much needed boost to your income.

Equity Release Lifetime Mortgages provide several options to supplement your current income. These include the ability to release a single lump sum; a lump sum with drawdown facility that you can call upon at any time in the future; a set monthly amount for life, or a mix and match of all options.

Equity Release Lifetime Mortgages don't require a monthly payment, but instead roll up the interest for repayment when the last surviving applicant dies, moves into long term care, or sells the property. However, for those that wish to, the monthly interest can be paid either in part or in full thereby reducing how much interest rolls up against the borrowing.

The release of equity in your property is only one of several funding options in retirement, and may not be suitable for everyone. For those considering an Equity Release Scheme, consideration of the following points is essential before reaching any decision:

1. Have you considered all the alternatives to an equity release scheme, such as downsizing, the availability of grants where the Equity Release Scheme is for the purpose of home improvements, use of savings etc?

2. Do you receive any means tested benefits, and do you know how an equity release scheme might effect your entitlements?

3. Do you know whether releasing equity from your property, will effect your tax position?

4. Have you spoken to your family and any other material beneficiaries of your Will, and/or an independent legal adviser?

5. Have you considered your health and life expectancy and taken into account the effect changes in the value of your house will have? Think of the impact that this could have on the plans for your estate and your Will.

6. Is the Equity Release Scheme you are considering the most suitable lifetime mortgage to meet your needs?

7. If the release of funds is for re-investment into any medium or long term investments, seek professional financial advice as this is rarely worthwhile?

8. Have you considered what your future plans will be such as moving home, ongoing commitments, income requirements, property maintenance etc?

9. Have you considered if the Lifetime Mortgage you are considering, exceeds your immediate needs, and whether it is suitable when considered alongside your attitude to risk?

10. Have you completed a realistic budget of expenditure for the funds to be released, including any drawdown facility to be applied for?

If having considered the above, you still feel that an Equity Release Lifetime Mortgage will be right for you, don't hesitate, simply contact an Independent Equity Release Advisor. There really is no substitute for seeking professional equity release advice. Most Equity Release schemes can be arranged directly with the lender, but undertaking the arrangements yourself, could prove costly if some of the subtle differences between plans are overlooked.


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For independent, impartial advice about Lifetime Mortgages and Equity Release Schemes contact Jerry Figueroa-Lee co-founder of The Mortgage Warehouse.