There are many benefits to taking out an equity release plan, which is why it is a popular finance option in later life. Though the decision needs to be carefully considered, many people choose to go ahead because of the financial flexibility it provides. Here are some of the top benefits.
Tax Free Cash
Equity release allows you to access tax free cash either as a lump sum, regular payments, or a combination of the two. This money is then available for you to use however and whenever you need it.
Keep Your House
Equity release is often a better option than other forms of finances because it presents no risk to your home in your lifetime. You’ll be able to keep living in your house until you pass away or move into long term care.
A key feature of equity release is that is doesn’t have to be paid back during your lifetime, though some people do choose to make repayments to keep the size of the loan down. That means you won’t have to worry about your monthly outgoings spiralling out of control. Instead, the loan will be paid off when you pass away or permanently move into residential care and your home is sold.
No Negative Equity
If you choose a lifetime mortgage with a member of the Equity Release Council, you’ll safeguard yourself against negative equity. That means if loan grows to the point where it exceeds the value of your property, this excess will be written off. Consequently, you won’t have to worry about passing debt onto your family.
Can Help Mitigate Tax
As equity release is tax free, it can help you minimise the amount of inheritance tax your estate is liable for. That’s because it can be given to your family as a cash gift without it being counted as part of your estate.