Get Advice On Equity Release Loans
As more and more people in the UK are now approaching and entering retirement with inadequate pension provision to maintain their standard of living, with many even still having outstanding loans and other debts to be paid out of retirement income, individuals are looking for alternative ways to supplement their income, or pay off their existing loans.
For many of these individuals who own their own home, an equity release loan, or lifetime mortgage, is becoming an increasingly popular option, as this allows a person to withdraw equity from their property in the form of a cash lump sum or income, without usually having to make any loan repayments.
Many retirees have been put off equity release loan schemes, after hearing various horror stories of huge loan debts and negative equity from schemes in the past leaving people worse off than when they took the loan out in the first place.
Nowadays, equity release loans are regulated by the Financial Services Authority (FSA) and there are extra levels of protection if the loan provider is a member of SHIP (Safe Home Income Plans). However there are still many different types of loan scheme available under the guise of equity release and it is easy for borrowers to make an expensive mistake, which may not be able to be fixed.
Although there are many benefits to an equity release loan, there can also be several pitfalls. Apart from the overall final cost of the loan through rolled up interest, any funds released through the loan could have an impact on a person’s tax situation, or benefit entitlements, for example.
It is therefore essential for anyone considering an equity release loan, to seek independent financial and legal advice from suitably qualified professionals, who will be able to guide them through the various loan options and pitfalls in order to find the most suitable solution for that particular individual.
