Is Equity Release Safe?
Is equity release safe? That is the question on many people’s minds these days. It seems like a good idea at first, but with all of the scams in the world, you never know what to believe anymore.
Here are some helpful questions to ask yourself before you sign anything:
What is the interest rate? Equity release loans offer fixed rates for up to 25 years with no early repayment charges. If your property has increased in value while paying off your equity release loan, it may be possible to sell it freehold rather than remortgaging if you wish.
Is there a guarantee of loan value? Equity release loans offer guaranteed values with no early repayment charges, meaning that if your property has increased in value while paying off your equity release loan, it may be possible to sell it freehold rather than remortgaging if you wish.
Who handles all of my assets and income taxes, etc.? Equity Release offers various schemes including lifetime mortgages which can help the whole family by splitting up any surplus funds from their home between them without having to pay inheritance tax on anything over £325k.
Also, equity release loans are backed by the Financial Services Compensation Scheme up to £75,000. That means that you are safe in the event of a financial institution default.
To conclude: is equity release a good idea? Equity Release is safe and financially sound, but only if you do it right. The key to making sure that your decision will work out in the long run lies not just with our lenders, but in doing your due diligence before signing anything! You should hire a qualified lawyer who specializes in these types of loans to make sure you know what you’re getting into as well as all of the possible consequences for any eventuality – such as death or incapacity after taking on this type of loan.