If you’re looking to sell your home to a quick buyer in order to free up some equity, then there are some things you should be sure to consider first.
Equity release is essentially the practice of releasing money from the value of your home by keeping use of your home while you carry on using its value to provide a new source of income. This elicits either a lump sum or a new monthly income which you can then make use of.
It works by including you into an equity release scheme which allows you to borrow money against the value of your home. That money is later on repaid, as and when your house is sold if you pass away or move into a care home.
These schemes work by allowing you to be lent a part of your home’s value in exchange for a share of the proceeds when, later in life, your home is sold.
There are all sorts of reasons why many people choose to do this. Some do it because they want to increase their income later on in life at a time when house prices are going up but income in retirement is falling.
People who are asset-rich but cash-poor look at this as a highly attractive prospect which enables them to take the value of their highest asset which is of course their home, and turn that into a new regular income source.
Consider Your Options
As in all such matters, you should be sure to consider all your options if you do make the decision to sell to a fast buyer on a site like House Network in order to make a speedy return.
These equity release schemes have some obvious advantages, however they are well known for being complicated and sometimes failing to offer those who take them, genuine value for money.
Sometimes you may find in certain schemes that hidden costs arise which you were not expecting, or risks that you didn’t know you were about to take when you originally signed up.
Maybe you will decide that you actually want to take a scheme that will allow you to make interest payments every month if that’s something you will be able to afford, or if you want to choose a scheme without early repayment charges.
Alternatively you may want to choose a drawdown scheme to allow you to have the option to borrow as and when you need to. Look into how entering into such a scheme will affect your entitlement to state benefits too.
If you take the time to consider your options then you’ll be able to free up equity in your house in the way that works for you.