Nearly twice as many Brits believe extending their property is a better financial decision than moving to a new house.
After living in your home for a number of years, carrying out home improvements can be all you need to fall in love with it again. In 2013, just three per cent of homeowners decided to improve their existing home instead of moving. That figure rose to 15 per cent in 2018. But with many of us choosing the home improvement route, how to pay for it can be another matter. According to Age Partnership, in 2018, more than 22 per cent of people who released equity from their homes used the funds to pay for home improvements. These homeowners chose to release some of their property equity to access a lump-sum of tax-free cash, within as little as eight weeks in some cases. But funding your home improvements through equity release isn’t necessarily the right solution for everyone.
No monthly repayments required
One of the main reasons that people choose the route of releasing equity is that there is no requirement to make monthly repayments if you don’t want to. This can free up even more disposable income to spend on getting your home just how you would like it. With a lifetime mortgage, the most common type of equity release, you could release from £10,000 up to 55 per cent of your property value. This would be more than enough to cover the cost of some new windows or a conservatory. You can spend the money you release as you wish, once you have paid off any existing standard mortgage that you may have.
Seek advice
Expert advisers will explore all options with you and will tell you everything you need to know about equity release, including the effect on the amount of inheritance you can leave, and if your entitlement to means-tested benefits could be affected now or in the future. Through the Mail Finance Equity Release Service you will be provided with a free quotation outlining what equity release
could mean for you. You’re under no obligation to proceed with anything that is
recommended to you. Only if you choose to proceed and your case completes would a fee of 1.95 per cent of the amount released be payable (minimum £1,495).
What's involved?
Equity release may involve a home reversion plan or lifetime mortgage which is secured against your property. To understand the features and risks, ask for a personalised illustration. Money released, plus accrued interest, would be repaid upon death, or moving into long-term care.