Pros and cons of equity release

If you’re wondering what the pros and cons of equity release are, below are a few facts that will help you understand the options you may have.

As with any big financial decision taking professional expert advice is always recommended. At Lifelink our advisers will discuss and carefully review your individual circumstances in order to confirm if Equity Release is the correct option for you. Not everyone’s circumstances will be right for this solution and careful consideration must be given should you be in receipt or due any State benefits. 

Advantages of equity release

Different options to access your money

With lifetime mortgages, the most popular form of equity release, you can decide how and when you’d like to access your money. You can either release a one-off tax-free lump sum (Lump sum mortgage) or after releasing an initial amount you may want to drawdown additional amounts in stages as and when they are required (drawdown mortgage).

Protection with Financial Conduct Authority & Equity Release Council

Lifelink Ltd are authorised and regulated by the Financial Conduct Authority (FCA) whose role is to protect customers and enhance the financial market’s integrity. When you come to Lifelink Ltd for equity release advice, you will receive clear and concise advice. In addition, Lifelink Ltd is a member of the Equity Release Council and as such follow additional guidelines offering you extra peace of mind.

Remain in your home

One of the main advantages to equity release is that you can remain in your home, allowing you to release funds for any (legal) reason you want, to renovate your property, make life enhancing alterations to it, take that once in a lifetime holiday, the list is endless. And should you decide at some future point to move you can take the mortgage with you to your new home (subject to lenders approval of the new home)

Disadvantages of equity release

Reduction in your estate

One disadvantage of a lifetime mortgage is the amount to be repaid can grow very quickly due to the interest compounding. Meaning if no payments are made the amount you originally borrowed will be increasing as time passes by. Full details are included in every personalised illustration.

Your Estate will be reduced.

A further drawback with equity release is the amount of inheritance your beneficiaries could otherwise receive due to the amount owing as mentioned above.

Early repayment charges

Equity release is designed to last for the remainder of your life so if you decide to pay it off early an additional repayment charge may be applied (depending on when the mortgage is repaid). 

If you want to find out more about the pros and cons of equity release

Whether you’d like to discuss the pros and cons of releasing equity from your home, or want to discover the range of equity release plans that could help you boost your finances in later life, call Lifelink on 01189 349800 for a free no obligation chat with one of our expert advisers.