How are homeowners spending the money raised from equity release?
In 2017, the number of people releasing money from their home using an equity release scheme has continued to soar.Equity release is available to homeowners who are aged between 55 and 95 and allows a person to release a tax-free cash lump sum from the value of their property.The money can then be used in almost any way, including making home improvements, clearing debts and helping family on to the property ladder.
Reasons people release equity from a home
A study has now been carried out to discover how people are choosing to spend the money raised through equity release.
- Home Improvements
Making home improvements is one of the most common reasons for taking out an equity release plan. 49% of people have used some or all of the cash generated by equity release to revamp their home.This can be used for making improvements to a home or making alterations to make a current home ready for later living.
- Paying off debts
Around 34% of people spent the money raised from equity release on clearing debts. This could be from credit cards, loans or mortgages.Equity release has increasingly been seen as an option to pay off interest only mortgages where people don't have the savings to pay off the mortgage at the end of its term.
- Helping children and grandchildren
In recent years it has become increasingly common for children to rely on their parents or grandparents to help them get on to the property ladder.Equity release is now being seen by many as an option to help family, with 21% of people using their money to provide financial support to help their family.
- Travel
Equity release is now being used by many to fund dream trips abroad. 16% of equity release customers studied jetted off to sunnier climes in their retirement.When heading into retirement, many people we speak to find themselves in a position where their money is tied up in assets. Equity release offers the option of releasing some of that money in order supplement a pension and offer greater financial freedom in later life.
Discover whether equity release could benefit you
Here at Farnworth Rose, our solicitors have team up with the expert financial advisors at Mortgage 65 to offer specialist advice on whether an equity release plan is right for you.By speaking to our experts, you can receive a free consultation on the options available to you with absolutely no obligation to continue.To book your free consultation today, talk to our experts on 01282 695 400.Or, simply complete our quick online contact form and we will be in touch with you shortly.