Learn to be a Financial Hunter - Not the Hunted

How To Find The Right

Equity Release Deal At The Best Price

STEP 1: Initial Equity Release Research
This guide assumes you have at least a basic knowledge of Equity Release, how it works, the different styles, advantages and disadvantages, as well as alternatives to Equity Release.

If you need a refresher please see the LearnMoney Equity Release section.

Collate your personal and property's information

Any Equity Release provider is obviously going to need plenty of personal details and information related to your property. This could include -

  • Estimated property value
  • Property details, ie type of accommodation/garden/garage etc
  • Age and general condition of the property
  • Details of any current mortgage, and who the lender is and what the terms are
State Benefit entitlements
Another important point to research is whether you might lose any state handouts if you release equity from your home, entitlements such as -
  • Pension credits, or
  • Council tax and housing benefits

This is because your savings are taken into account when assessing your benefits. The government recently raised the threshold from £6,000 to £10,000, but a lump sum cash injection might take you over this limit. Your equity release provider should be able to help you with these matters as a plan can often be structured to avoid your savings exceeding the £10,000 limit.

Start to formulate some rough Equity Release ideas
Start to consider some ideas about what you want and need from Equity Release, for example -
  • What style of equity release plan is best suited for your circumstances
  • How much money you're looking to release from your property, and
  • A basic plan of what you're going to do with the money

The last point is important because sadly many people who have released equity from their homes have been seduced by the distasteful and reckless lifestyle marketing pushed by the majority of the equity release providers.

For example, the marketing people love to try to seduce us with pictures of cruises, conservatories or smart new cars as potential purchases. However, it is very dangerous and quite frankly morally irresponsible of them to suggest this because the majority of people releasing equity cannot afford to spend their money in this way.

What has unfortunately happened is that many people who have released equity in the past, blow 25%-75% of the cash within a few years, and then find themselves -

  1. Running out of money
  2. A large percentage of the property owned by the equity release company, and
  3. No way to release any more money or earn any more income

My advice is therefore simple -

  1. It's absolutely critical to get some sort of plan in action where yes, a small proportion (up to 10%) of the money can be used to have some fun
  2. But the majority must to be used for everyday living expenses.

Also, realise that most people are living longer these days so it's possible for someone who released money when they were 70 still to be very much alive and kicking 15-20 years later.

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