Hello, I live in Burnley and have worked as a real estate agent for many years. I know the city’s property market very well. In my job, I’ve helped people in Burnley make sense of their property options, including when releasing equity might be a good idea. With the higher cost of living and growing property prices, releasing equity has become a realistic choice for many folks trying to improve their financial standing. But is it the right choice for you? This guide will give you all the information you need to understand equity release and help you choose what’s best for you.
Releasing equity means getting hold of the money tied up in your home. It’s often looked at by homeowners who are 55 and older. If you’re looking for a way to free up some cash from your property, like for your retirement, or to settle any remaining mortgage debt, releasing equity can be a great option. But it’s not good for everybody, and you need to think it through carefully before you decide.
Before Burnley homeowners think about releasing equity, they need to check if their property is eligible. Usually, a home needs to be worth at least £70,000 to be considered for equity release. The average home in Burnley costs about £135,000, so many homes in the area fit this requirement. But just because your home is valuable doesn’t mean releasing equity is the best move for you.
It’s vital to weigh up your personal and financial needs. If you need cash to add to your retirement income or to cover care costs, releasing equity from your home could be a good idea. But there might be cheaper ways to help family members financially. You also need to consider how releasing equity would affect your inheritance and tax situation.
An independent financial adviser can be really helpful. They can explain the two types of equity release schemes: lifetime mortgages and home reversion plans. Lifetime mortgages let you borrow part of your home’s value, while home reversion plans involve selling a piece of your property.
Discussing this with your family is very important, too. While releasing equity can have lots of benefits, it could also affect your family’s inheritance. So it’s important to talk this through to avoid any confusion later on.
Moreover, think about what might happen in the future. If you might need to go into care or want to move to a smaller home, releasing equity could make this harder. Plus, some lenders charge you if you pay back early, making releasing equity more expensive if your situation changes.
To wrap up, releasing equity is a big financial decision with its own upsides and drawbacks. For homeowners in Burnley, the high value of property could make releasing equity seem attractive. But remember to think about all aspects of the decision and get professional advice to make sure it really does benefit you. While releasing equity can help you financially right away, it can also affect your inheritance, taxes and future living plans. Deciding whether it’s the right choice means reviewing your personal needs, financial situation, and long-term plans. As your local property expert, I can guide you through this process and help you make the best choice for you now and in the future.