Owning a home is a significant financial achievement. But it does not stop there. You can still squeeze the value of your property for some financial goals you may have in mind for yourself or your family. According to recent research, there are more than 6.3 million people in the UK who own their home. With the capital you have invested in your property, you can take advantage of equity release to use the cash for significant expenses.
What is equity release?
Home equity release refers to the cash equivalent of the current market value of your property, less any outstanding debt or mortgage secured against it. If you have owned your home for a long time, you will likely have benefitted from the rising local house prices. This means it is possible that the equity in your home is already quite substantial. By taking advantage of an equity release loan, you will monetise the value of your home without having to sell it.
How to use funds from a home equity release
Spending the money which you get from an equity release loan is entirely according to your preference. Nevertheless, it is always best to consider wise options, especially since an equity release loan will have an impact on your long-term financial stability.
- Use the funds for home improvement. An older property could always use a few upgrades. Perhaps you have been planning on an upgraded kitchen, a new bathroom, or a fancy conservatory? An equity release loan is a perfect solution for acquiring the funds you need to get the work done.
- A more comfortable retirement. Retired individuals might use the equity value of their home as a means to boost their pension funds. If you want to fund a more comfortable lifestyle, yet have a limited cash flow, home equity release is something worth considering.
- Helping family members. No one is exempt from experiencing family problems and struggles. If you are already in a comfortable position financially, you may consider using the equity value of your home to help a child or any family member going through financial troubles. You can also use any leftover funds as part of the inheritance you will leave your children.
- Leisure and luxury. Travelling and having a bit of fun in your retirement is a treat worth considering. For someone who has worked hard for a long time, buying a nice car or a holiday in a fancy destination is a luxury well deserved.
- Retirement planning. Retirement is another stage in your life that can cause uncertainty and concerns. If you are not financially prepared, you will end up struggling and becoming a burden for family members. If you want to go through retirement free of worries, you can use home equity release as an additional source of funds. This is a perfect option for those who are not expecting to receive a hefty pension from their previous employment.
Equity release is a significant decision, and your home is one of your most valuable possessions. Like any crucial financial decision, it is best to begin by looking at the facts and getting advice from a financial expert.