Is equity release a good idea? Equity release definitely has some great advantages, and here they all are! 1. It is Tax-Free. The good thing about equity release is its considered a refundable tax-free loan, which means that the money released on release is tax-free – never money that you have to pay back.
The tax deduction of the interest paid on this loan could be quite huge. So it is always better to know more about the pros and cons before you take any action. One of the major pros of this loan is the tax break. The tax expert or adviser can give you more about this in a second. Another pro is that there are very few pros of this process.
One of the disadvantages of this option is that you may lose some amount of your retirement savings. There are some situations where the actual amount saved may not be enough. So it is always better to check with your independent financial adviser before deciding this for your self. Another disadvantage is the length of time the money is allowed to be borrowed. Usually you are only allowed to borrow a maximum of 20% of the value of the estate. This means that you cannot be using the money for a holiday or something else that does not involve much cash.
Now if you are asking is equity release a good idea because you want to release money to pay off some debts, then the answer is yes. You can do this as long as there is an available sum of money left over after the taxes are taken out from your retirement income. However you should keep in mind that this is only possible if you will be able to sell the property within the timeframe indicated by the plan. If you are not able to do so then you should check into a new plan with a different exit plan so that you release equity quickly and effectively when it is needed.
Finally, the last thing to check out when asking is equity release a good idea for me if I am planning on selling my house in the future. There are two ways that you can go about this. Firstly, you can offer your home as a marketable asset. This is where you offer it to a company that is looking to purchase it. They will then take the money that you have left as your pension and use it to buy back your home.
The other way is to use the second mortgage as security for a new loan. This is a very popular way of doing this as there are usually very low rates of interest involved and you can use it to finance any number of things. One example of this is paying off your current home loan with the money from the second mortgage. Another key equity release product to consider is to use the equity that is built up within your account to pay off your debt. This can help you avoid having to sell your home and you will have a lower cost when you are retired.