Important Steps towards Releasing Equity from Your Property
If you are considering releasing equity from your home, you should be aware of the application process and the procedure which should be followed to ensure you obtain the best possible deal. The equity release industry is highly regulated and there are a number of rules which advisors and brokers must follow. This is because the decision to begin an equity release scheme will not only affect you but can also impact your beneficiaries.
Finding an Advisor
The first step towards releasing equity from your home is to find a suitable advisor. Finding a qualified, experienced advisor need not be a challenge and there are a number of online resources including the Equity Release Council website which provide information for equity release advisors both locally and nationwide.
Your advisor will begin with a factfind document. This is a document which basically ascertains the situation of your current finances, what are your objectives and what your attitude is towards inheritance. Your advisor will ask if you have discussed releasing equity from your home with your beneficiaries, since it may affect the inheritance that you leave behind. The factfind document allows the advisor to assess your options which would be best suited to attaining your goals.
Deciding if Equity Release is Best for You
In order to ascertain whether equity release is the best option for you, your advisor will talk to you about exploring the alternatives. In order to be sure of your decision, you should answer the following questions:
• Would downsizing to another property be a better suited way to release the equity in your home?
• Have you investigated whether you would be eligible to claim any government benefits such as pension credits, which could assist you financially?
• Have you asked any family members if they could provide some short term financial assistance?
• Have you considered other conventional financial products such as credit cards or personal loans which may better suit your requirements?
• Could you obtain an additional income by taking on a lodger or renting out a part of your property?
• Do you have any savings or investments which could be used for your financial needs instead of committing to equity release?
• Can you make some reductions for your expenditure to save some money and relieve the financial pressure?
• If you are planning to use the equity release for home improvements, have you checked if you would be eligible for any grants which could cover part or all of the cost?
Once the advisor has assessed whether any of these alternative scenarios would provide a more suitable solution for you, they can see if equity release is the best option for your circumstances. If all the alternatives have been eliminated by speaking with you and you have made the decision to proceed, the advisor will explore the equity release options which may be suitable for you. These will include whether you wish to make a monthly contribution towards the interest, whether you wish to leave any inheritance for your beneficiaries and what your attitude to risk is.
Other Important Steps
In order to facilitate the process, you will also need a solicitor. Although you may have a current solicitor, you may find that the application process is smoother and faster when utilising a solicitor experienced in equity release.
If you are thinking of releasing equity from your home, it is important to fully explore your options and ensure it is the best option for you. It is important to discuss it with your children to ensure you can proceed with full confidence it is the decision best suited to your needs.