Equity Release Strategies for a Rising Climate

In the past, retirement was a time to relax and enjoy life. You would get up in the morning when you wanted, eat what you wanted for breakfast, go out whenever you felt like it, and spend your days doing whatever activities you were interested in. Nowadays though many people are struggling with financial concerns that make this dream impossible. Part of these struggles comes from not understanding how drawdown equity release can help them achieve their retirement goals.

We have found that many people are confused about how equity release is different from other methods of financing. Equity release uses the value in your property to help finance retirement while mortgage and borrowing use future income as collateral for a loan. This means you don’t need to sell all of your assets or take out loans with high interest rates, but instead can tap into what you already own at an equitable rate.

The key to understanding how drawdown equity release can help you is knowing what your options are.

A reverse mortgage also helps with paying down debt, but there are drawbacks including having no control over when payments start (often at age 65) and an interest rate on the mortgage that can be higher than the interest rate on other loans.

Another option is to get a home equity loan, but this comes with high interest rates and very strict qualifications for qualification including being younger than 65 and having an income.

Equity release is not limited to those who are retired or nearing retirement age. It’s also a solution for people who want to fund renovations/improvements by tapping into their property value without selling it. For example: If you have a single-family house worth $400,000, borrowing against your home will cost less in terms of monthly payments (and total over time) than renting out the spare bedrooms.