Equity Release Mortgages  Alternatives To Equity Release

Equity Release Mortgages

Equity release schemes offer property owners the opportunity to raise cash from the value...

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Equity release is a drastic step that could potentially have serious future repercussions for property owners and their heirs. After they have retired, property owners should review all their finances and work out the options they have available for boosting income or reducing expenditure, before they consider equity release.

Downsizing
With the rises in property prices that have taken place during the last 30 years, selling up and moving to a smaller property is often an attractive option for property owners wishing to increase income and reduce costs.

Not only will moving to a smaller property release cash that can be invested in income generating savings accounts, bonds (or maybe even an annuity), but household expenses will also be reduced, as a result of lower council tax and utility bills. For people in poor health, this could be the ideal opportunity to get away from the increasing burden of household and garden maintenance, especially if some form of sheltered accommodation is chosen.

Other Financial Options
Retired people should review their financial positions to ensure that they are receiving everything to which they are entitled:
Bullet Point claim all benefits for which they are eligible;
Bullet Point find out whether the local council will contribute towards the cost of essential home improvements;
Bullet Point use the Pension Tracing Service:
to find any pensions that are not being paid;
Bullet Point make changes to investment portfolios in order to generate more cash.

One further point to ponder: if a retired person is currently receiving means tested benefits, these might be cut if the person starts to receive cash from an equity release scheme.

A reputable financial adviser should be able to advise whether equity release would suit a particular individual's circumstances. Because of the variations between different schemes, independent financial advice is essential to ensure the right decision is made.

Summary
Bullet Point Property owner should consider all other options before proceeding with an equity release scheme;
Bullet Point downsizing is usually a much more cost effective option than equity release, if at all possible;
Bullet Point retired people should ensure that they are receiving all pensions and benefits to which they are entitled.

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