Equity Release Loan Figures Increasing
The high cost of living coupled with poor savings and investment returns at the moment, has encouraged more individuals who are either in, or approaching retirement to take out an equity release loan from the value of their property, according to one equity release loan specialist.
The number and value of new equity release loans has increased by around 5 per cent over the first half of this year, according to the figures from equity release loan specialist, Key Retirement Solutions.
Since the credit crunch, the equity release loan market has seen a general and steady decline, as people have been uncertain of how the property market was likely to perform, despite there being a no negative equity guarantee on the majority of these loan products.
But new developments to the range of equity release loan products, has encouraged more individuals to take advantage of the value locked up in their home, with the option of drawing down funds from the originally agreed loan amount as and when they are needed, being of great benefit to many new borrowers.
This makes for a cheap loan option for many equity release loan customers, as interest is only charged on the loan once the funds have been drawn down, rather than on the whole amount of the loan at the outset.
Whilst many have been using equity release loans to help fund their lifestyle in retirement, a growing number of individuals are using this type of loan to repay more expensive personal loans and credit cards, thereby reducing their committed outgoings in retirement.
Other uses for equity release loans are to help children and grandchildren with deposits for their first home owner loan and house, or to help with the funding of long term care home fees.
