Article | Jul 2024
Have you ever wondered how you can achieve your dream retirement? Maybe you’ve already started investigating ways you can tick off all your retirement goals. Perhaps you want to go on a luxury cruise, pay off your mortgage, or improve your property. Well, the answer could quite literally be very close to home.
Equity release enables homeowners over the age of 55 to unlock value in their property and receive a tax-free lump sum of cash. But what could equity release mean for you?
At Responsible Life, we have a team of expert advisers who can provide you all the information you need. Equity release works by enabling you to access equity from your property that could be available to you. So, if your home is worth at least £70,000, you could release a portion of your home’s value, tax-free.
There are lots of ways you can use your equity release funds. In this guide, we will discuss what you should consider around funding your dream retirement through equity release.
If you’re going to opt to release equity from your home to fund your retirement, you will be wondering what the benefits of equity release are. One of the benefits is that unlike some equity release alternatives, you will still live in and own the home you’ve built all your memories in.
The interest rates on equity release are also fixed for life, so you will always know how much interest will be added to the amount you owe. In addition, if you choose a lender who is a member of the Equity Release Council, you will have a no-negative equity guarantee. This means that you will never owe more than your property’s value.
It is worth considering though that interest compounds overtime and therefore the amount you owe increases over time. However, if you opt for a Lifetime Mortgage, you have the option of making voluntary repayments to reduce the overall cost of borrowing.
This means that you can fund your dream retirement in a way that allows you to have flexibility for repayments and ensures you keep ownership of your home. It is also important to be aware that releasing equity will reduce the value of your estate and may affect your entitlement to means tested benefits, so consult with a qualified adviser before making any decisions.
Everyone has different dream retirement goals that they want to achieve, so the amount of money needed to fund them will vary. The good news is that it is easy to work out how much money you could release from your property through equity release.
We have created a free equity release calculator that will give you an estimation of the amount of money you could receive through releasing equity. The amount will depend on a couple of factors. These include the age of the youngest homeowner and the most recent valuation of your property.
You should also consider the costs of equity release, as this will likely be deducted from your dream retirement funds.
Whilst there is no charge for your initial meeting with our equity release advisers, our current single advice fee after having completed a case does not exceed £1,690 and is a one-off sum. Unlike other companies, we charge a capped fee rather than a percentage of the amount you choose to release. This means you don’t have to pay more for wanting to borrow more.
There might also be fees towards your solicitor and home valuation during the process, should you choose to proceed with an application.
We have created a helpful guide to help you further understand all the associated costs of equity release.
When opting for equity release, you can decide how much cash you want out of what’s available to you. Having this flexibility means that you can work out exactly how your retirement ambitions could become a reality.
If you want more information on equity release or how to fund your dream retirement, call us now on 0800 048 5807.
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