Increase Your Home Equity: Understanding the Risks and Rewards
If you are considering to release equity from house, you should know that there are a number of points to consider before taking this step. Equity release is not for everyone and in order to make an informed decision, it’s important to educate yourself on all aspects of the process.
The following points are some considerations when you want to release equity from your house:
How long do you want the cash? Equity release products can range from five years up to 25 years in length and this will change how much interest is charged on your loan.
What are my other options? You should also think about what else could provide the amount of money that you need – such as borrowing against another asset, taking out an unsecured personal loan or asking friends and family members if they would like to lend you the funds instead.
Do I have time constraints? If so, it might make sense not to take any action because there’s no guarantee that someone won’t offer help or a
What other options do you have available? There are many methods that exist outside of releasing equity from your house which could work better depending on individual circumstances. For example, some people might consider borrowing against their pension plan instead as they won’t lose a large amount of money.
How quickly do you need the money? If it is an emergency situation and you don’t have a lot of time to spare or if there’s not much equity in your property, then this option will be out of reach.
Do any children live with you? Equity release can often exclude family members who are resident in the home so make sure everyone knows about any arrangements before