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Cornwall LivingIssue #66

Freedom of choice

Financial advice expect Matt Begley talks us through pros and cons of equality release.

You’re free to do whatever you like with the funds raised through equity release, which is why it appeals to such a wide range of people.

“With their experience they can advise on the best way forward…”

With the impact of interest-only mortgages and care needs, more and more people are looking to equity release as a solution. For the former, there were 1.9 million interest-only mortgage loans still in play at the end of 2016, accounting for 21% of all homeowner mortgages.* If payment vehicles aren’t able to fully cover the cost of the mortgage at the end of the loan term, then one option may be to raise funds through an equity release plan.

With regard to care needs, many people would ideally prefer to remain in their own home, avoiding sizeable care home costs (in the realms of £31,000 to £44,000 per annum, unless you qualify for an element of means-tested support**). At-home care can be a more manageable at around £11,000 a year for 14 hours a week, and this is where an equity release plan could help – although do balance this against any means-tested state benefits, and threshold plans for care funding.

In between these two needs, there are a whole host of reasons why you may want to raise funds via equity release – to pay bills, settle debts, complete home improvements, upsize your home, gift money to family and friends or perhaps take the holiday of a lifetime you’ve always dreamed of.

While equity release can be the best solution for some, it is wise to consider the alternatives, which may replace the need for an equity release plan, or perhaps reduce the size of it. For example, downsizing your home or looking at your existing investments and savings portfolio might be other options to consider. This is where the experts at Harris Begley Financial Planning can help. With their experience they can advise on the best way forward with a free, no obligation financial health check.

PEACE OF MIND

Borrowing via an Equity Release Council member means controls are in place to protect you,

All products from Equity Release Council members have a guaranteed security of tenure, so customers are allowed to remain in their property for life, or until they move into long-term care, provided that the property continues to be their main residence. In the case of a joint policy, this then applies to the last surviving borrower.

Plans from Equity Release Council members have a ëno negative equityí guarantee, meaning that regardless of the home’s value or how long the customer lives, they will never owe more than the value of their home and no debt will ever be left to the estate.

"With their experience they can advise on the best way forward..."