Paying off mortgage with equity release
A popular use of equity release is paying off your existing mortgage. In fact, repaying an outstanding mortgage or any other loan secured against your property is a requirement of an equity release plan. Equity release unlocks the value built up in your home as a tax-free lump sum, which is then sent directly to your mortgage provider to pay the remaining balance of your mortgage. Any funds left over once your mortgage has been paid can be used for other purposes.
Mrs Onyett, was looking to repay her interest- only mortgage, she told us ‘I needed a solution to repay my existing interest-only mortgage which was coming to the end of its term and my existing mortgage lender was not willing to extend the term. I absolutely did not want to move from my home of over 40 years so wanted to explore a long-term solution and equity release seemed to fit the bill’.
Home & garden improvements
‘Our property needed money spending on it, (new garage roof, fencing, new driveway, gates, update kitchen and bathroom and build a beach hut) to make it how we would like it to be, so we explored the options. The whole process was easy to understand and went through quickly and without any problems or delays. It has given us a great feeling of contentment. It has brought our house back to life.’ Mr & Mrs Page
Holiday of a lifetime
In 2021, 31% of homeowners used the equity they released from their property to fund a holiday*.
Do you have a travel bucket list, or want the opportunity to visit friends and family in far-off places?
Another one of our valued clients, Miss Johnson, whilst doing some home improvements also wanted to visit Brooklyn, she told us ‘I wanted new windows, to go to Brooklyn to see my niece and have a cash reserve as peace of mind too.’
Important info about equity release
Always seek independent advice when considering any financial decision.
- A lifetime mortgage is a loan secured against your home and subject to compound interest, meaning the amount you owe can grow quickly
- Equity release will reduce the value of your estate
- Equity release may leave you with limited or no property equity remaining
- Equity release may affect your entitlement to means-tested benefits
- Equity release will reduce your financial options in the future
Alternatives to Equity Release
There are several alternatives to consider:
Downsizing is one option, where you sell your current home and move to a smaller, less expensive property, freeing up cash in the process.
Renting out a room or property can provide a steady income stream.
If you’re of pension age, you might be able to take advantage of pension drawdowns or annuities.
Another option could be to take out a secured loan or mortgage, although this would require making regular repayments.
You can also look at government benefits or grants that may be available for certain individuals, particularly those with low incomes or specific needs.
Whatever you consider, it is important to carefully consider all options and seek professional advice before making any decision.
Let's Discuss Retirement
Paying off unsecured debts with equity release
Equity release can be helpful if you want to repay any unsecured debts, such as credit cards or loans. However, it is not right for everyone, and an independent equity release adviser will be able to discuss your needs in more detail. Think carefully before securing other debts against your home. If you are thinking of consolidating existing borrowing, you should be aware that you may be extending the terms of the debt and increasing the total amount that you pay.
Helping family, friends, and loved ones
Wouldn’t it be nice to have funds to support your loved ones financially? From helping family and grandchildren onto the property ladder to paying for significant life events, we’d all like to help those we care about. Always seek advice and be aware that releasing funds from your property will reduce the value of your estate.
‘We want to say thank you for the remarkable work you did on our behalf. No problem was too small for you to deal with and sort for us. And thank you for sharing your knowledge and patience with us to make the whole process straightforward and the hiccups you dealt with swiftly with an excellent result. Once again thank you Elaine’ – Mr & Mrs King
With retirees using funds from their homes for these reasons. If you’re considering releasing some of the equity release to fund your retirement needs, it’s important to speak to an independent equity release adviser. To book an appointment, call us on 0800 043 0725 or click here to request a call back.
Seek Independent Advice
If you are a retired persons contemplating fundraising from their property. You must recognise the significance of seeking independent advice. To help navigate this complex financial landscape effectively.
Whether considering downsizing, equity release, renting out property, or considering one of the other alternatives to equity release. Retired people like you must weigh the benefits and risks of each option in light of their individual circumstances and goals.
Independent advisers play a crucial role in providing retirees like you with the expertise, perspective, and guidance. Providing you with the balanced and unbiased information needed to help you make informed decisions, and help you secure your financial well-being in retirement.
By leveraging independent advice, you can confidently navigate the process of raising funds from your property. But there are no guarantees that you will be able to do so. Everything is subject to your personal circumstances.
