Don’t Use Equity Release for These Reasons
There is nothing wrong if you decide to get equity release, especially if you will use the money you borrowed right away. The loan provider will not kick you out of your place if you can’t repay the loan. You will only pay the loan when you die or when you are moved into hospice care. They will sell the property, and the sale value will go to the people you leave behind. However, the loan provider will deduct the amount you borrowed from the sale value, plus the interest.
The key to getting this loan is to use the money right away. You need to enjoy the amount you borrow since you are getting old. You will only be eligible for equity release when you are 55 or over. You need to be smart in determining how to use the money you borrow. These reasons for getting equity release are unacceptable.
You don’t want to use the money to start a business since you don’t know when you will get a return on the investment. You don’t even want to have something to worry about at this age. You could die soon because of health complications, and you can’t leave a new business to the people you love as it would also burden them. It is not a good plan to start a business with the money you borrow, so you need to take it off your list.
Paying regular bills
Although some people use the money to pay monthly bills, it is not a good idea. The amount is too small for you to tie up your property to a loan provider. You can use other types of loans for a small amount. You will regret this decision later on, especially if you are paying recurring bills anyway. It is only acceptable when you are paying a mortgage and other major loans, where the amount is too significant for you to settle with regular loans.
You have no plans
Start thinking about equity release only when you have definite plans. If you are yet to plan what to do with the money, you need to suspend getting the loan. You might start using the borrowed amount on small and insignificant stuff. Before you know it, you will have already used up the amount.
In the end, it is your property, so you decide what to do with it. You can be selfish if you want to, but you also need to be practical. You can use the money for a trip. You can buy whatever you want with it. You can use it for home improvement. As long as you can enjoy the money right away, it is understandable. No one will question your decision. Don’t forget to think about your future and your children, especially if you have nothing else to leave behind apart from the property, and its value.
Check out http://www.55plusequityrelease.com for more information about equity release. With the help of these experts, you will receive information on equity release to help you decide.