Top 5 Benefits of Equity Release

The average cost of a detached, semi-detached, and terraced house in the UK is £365,697, £225,674, and £194,167. Some homes are more costly than others are. A few of them have values as high as £8 million or even £35 million. Unlocking the value of these homes is possible if you own them. More specifically, banks can release part of this value to you if want them to do so. However, that is only possible if you meet a particular set of conditions. Check with a reputable financial institution to determine if you qualify for this release. Here are 5 benefits to Equity Release.

1. Carte Blanche
You have unlimited discretionary powers to use these funds as you see fit. That means you can use them for home improvements, business ventures, holiday trips, or pressing family issues. You can also use it to pay off accumulated debts. This flexibility is absent in conventional loans. For example, car loans are for purchasing vehicles only. Home loans and business loans have singular purposes as well. Therefore, going for Equity Release is the best option you can exercise because you can use it for multiple needs.

2. Home Retention
Receiving an Equity Release does not lead to the forfeiture of your home. Consequently, you can enjoy the proceeds of the release while living in that home. You can also live rent-free in that house for the rest of your life if you choose to do so. It is worth noting that the value of your home appreciates as time goes. The financial institution that gave you the Equity Release will only ask for what is due to it. That means the increase in the value of your home is exclusively yours if you repay your loan in time.

3. No-Negative Guarantee
Nearly 8.3 million Britons cannot pay their household bills or debts. These figures from the NAO (National Audit Office) are astonishing. They occur because conventional loans increase perpetually making it hard for people to pay back their debts. Fortunately, Equity Releases are different. More specifically, they have a no-negative guarantee attached to them. In other words, you will never owe the financial institution any amount that is more than the value of your home.

4. Highly Regulated
Equity releases affect three sensitive areas, i.e., finance, housing, and retirement. They affect retirement schemes because they deal with elderly people who are above 55 years. Dealing with all these areas means that this financial instrument comes under a lot of scrutiny by relevant agencies. Some of these agencies include the ERC (Equity Release Council) and the FCA (Financial Conduct Authority). The ERC is a non-governmental body supporting ethical practices in the issuance of Equity Releases. The FCA is a government-run regulatory authority.

5. Tax-Free Income

Many people fail to realize that money received through an Equity Release is tax-free. That is excellent news for those receiving releases because they can escape the already high tax burden that many Britons are experiencing. However, you will pay taxes on these funds if you put them in a savings account. Therefore, the best option for you is to use buy assets with these releases or settle long-standing debts. Click for more information on Equity Releases.

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