Lifetime mortgages (also known more commonly as equity release) have come a long way in recent years, but there are still many misconceptions about these products, and they are still suffering the reputational damage from previous incarnations.

Lifetime mortgages allow homeowners to release the equity tied up in their property, without having to sell their home or move out. This option can be a great way for people to access cash that they need, while still being able to live in the home they love.

Here are some ways equity release has improved, common misconceptions dispelled, and examples of why someone may choose to use it and the benefits it brings.

Improvements in equity release

Equity release has improved in many ways, including better regulation and more flexible products. In the past, equity release products were not as well-regulated as they are now, which led to some concerns about unfair practices and terms imposed by the lenders. However, in recent years, the Financial Conduct Authority (FCA) has introduced new regulations that require equity release providers to provide fair and transparent information to customers. This has helped to improve the safety of equity release products and make them more accessible to a wider range of people.

Another area of improvement is the flexibility of products. In the past, equity release products were quite inflexible and did not allow for changes to be made to the original agreement. However, many providers now offer products that allow for greater flexibility, such as the ability to make partial repayments, switch to a different provider, or even move to a different property and retain the borrowing.

Common misconceptions about equity release

There are many misconceptions about equity release, which can make it difficult for people to make an informed decision about whether it is right for them. Some of the most common misconceptions include:

• Losing ownership of your home: This is not true. With equity release, you are still the owner of your home, and you can continue to live in it until you die or move into long-term care.
• Owing more than your home is worth: With most equity release products, there is a guarantee that you will never owe more than the value of your home. This means that you do not have to worry about leaving a debt to your heirs.
• Reduced inheritance: It is true that equity release may reduce the amount of inheritance that you can leave to your heirs. However, many people choose to use equity release to provide financial support to their loved ones while they are still alive, rather than waiting until after they have died.  You can also elect to service the interest payments, to ensure that the debt does not roll up or compound over time.

Examples of why someone might choose to use equity release

There are many reasons why someone might choose to use equity release, including:

• Supplementing retirement income: Many people use equity release to supplement their retirement income, especially if they do not have a large pension or other sources of income.
• Home improvements: Equity release can be a great way to fund home improvements, such as a new kitchen or bathroom, or to make adaptations to the home to make it more suitable for aging in place.
• Paying off debts: For some people, equity release can be a way to pay off high-interest debts, such as credit cards or personal loans, which then free up more of your pension income to support your living costs in retirement.
• Helping family members: Some people choose to use equity release to provide financial support to their children or grandchildren, such as helping them to buy their first home or pay for education.

Benefits of equity release

There are many benefits to using equity release, including:

• Access to cash: Equity release can provide a lump sum or regular income, which can be a lifeline for people who need cash for a particular reason.
• Flexibility: Many equity release products are now more flexible, allowing you to make changes to the agreement if your circumstances change.
• Security: With most equity release products, there is a guarantee that you will never owe more than the value of your home, which can provide peace of mind for both you and your heirs.

In conclusion, equity release has come a long way in recent years and is now a well-regulated and flexible financial product that can provide a range of benefits to homeowners. While there are still some misconceptions about equity release, it is important to remember that this product can be a great way to access cash without having to sell your home or move out. Ultimately, whether or not to use equity release is a personal decision that should be made based on individual circumstances, but with specialist advice from a whole of market professional adviser, such as Taylor James Financial Services, it can be a valuable tool for those who need it.

Taylor James Financial Services offer whole of market equity release advice in Croydon, and the surrounding areas, including Warlingham, Selsdon, Purley, Banstead, Westerham and Caterham.  If you are looking for to speak to a local, specialist, equity release adviser near Croydon, please contact Taylor James Financial Services today for a free consultation. 

Looking to access the equity in your home without having to sell or move out? Equity release might be the solution you're looking for! Our latest article explains how this financial product has improved in recent years and dispels some of the common misconceptions surrounding it. Learn about the benefits of equity release and why it might be the right choice for you. Interested in exploring your options? Contact us today to find out more.

Please note:

• Your home may be repossessed if you do not keep up repayments on your mortgage.
• Equity release, lifetime mortgages & home reversion plans will reduce the value of your estate and can affect your eligibility for means tested benefits.

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