With inflation having such a large impact on peoples standard of living later in life, ways of releasing extra money are very slim. One such option is by releasing equity through the family home. There are a number of schemes and companies which will help people do just this. However whilst the option will help the person live more comfortably, there are of course what may be seen as negatives to equity release.
Equity release works by helping the home owner achieve a much higher standard of living in retirement through offering them a loan on the value of their property. A lump sum, a weekly payment or a combination of both can be used to pay the loan. Upon the owner’s death or upon them selling the house and moving to a retirement home, the company will become the owner of the property and reclaim its financial input.
The difficult decision comes in as a lot of people aim to leave their home to their children or keep it in the family. Whilst the participant must be certain that it is the correct option for them and that those family members who may have been in line previously to take ownership of the property will understand their reasons and that the benefits of equity release are clear and also can have a greatly positive effect on their standard of living.
However, as it is their home, ultimately their family should understand how the participant will be allowed to fulfil any possible things which they still wish to do as they benefit from the equity release option. A person’s standard weekly payments will increase drastically through the equity release option and will help them become comfortable for what lies ahead.
The owners of the property will be allowed to maintain a similar living standard to that of when they were working, and whilst it does have the downside of losing what possibly might have been a family home, equity release is of course optional. Various luxuries such as holidays will become available with the finances from equity release which may not have been allowed by pensions affected by inflation.
Get more information on equity release.
