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A myth-busting guide to equity release

Many households across the UK faced substantial financial challenges in 2024. So, it's no surprise that many over-55s are choosing to boost their finances by releasing funds from the value of their home.

If you're considering releasing equity to bolster your retirement income, fund a one-off expense, or to gift a 'living inheritance' to your family, here’s our myth-busting guide to some of the most common equity release myths about repossession, negative equity, and more.

What is equity release? Equity release lets homeowners aged 55+ access some of the value of their home, as a tax-free lump sum, several smaller amounts, or a mixture of the two. The amount of equity potentially available is the difference between the value of a home and any outstanding debts (such as a loan or mortgage) secured against it. For those who don't want to downsize, it's a way of releasing equity from the value of their property without having to move.

Why is equity release so controversial? Any financial decision involves careful consideration, so it's only natural that people may have concerns about whether or not equity release is the right choice for them. However, unlike money made from selling a house, the equity you release from your home is tax-free. That's why some people choose to use equity release to access money to leave for their children.

Plus, if you're concerned that equity release might eat into your family's inheritance, you can choose to protect a proportion of your home's equity for your family by ring-fencing it using what is known as 'Inheritance Protection Guarantee'.

It's also reassuring to know that there are guarantees in place to stop your house from being repossessed or finding yourself in a situation where you owe more than your house is worth.

The 'Tenure for Life' guarantee ensures no contractual repayments are needed or expected during the borrower's lifetime, and the 'No Negative Equity Guarantee' means that if your home were to sell for less than the outstanding mortgage, the difference would be written off.

How to explore equity release with confidence Equity release should be a carefully considered choice. Ultimately, only you will know if it is the right decision for you based on your circumstances.

We know that the big numbers involved and multiple options available (there are currently almost 400 equity release products on the market) can be overwhelming. We also know that, with interest rates at an all-time low, now is the perfect time to release equity.

So if you're considering releasing equity, our decades of experience of later-life financial security means you'll be in safe hands with Evolve Lifetime. We'll analyse your personal situation (including your age, income, and future plans) and offer independent financial advice on whether equity release is the correct approach at this moment in time.

Should you wish to proceed, all of our plans meet the Equity Release Council standards, which means you'll never owe more than the value of your home, and no debt accrued through equity release can be passed on to your family. Ultimately, we'll find the best solution for you.

To find out more please get in touch today on 01473 798500.

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