Equity Release Cash Lump Sum Can Be Used to Help Your Family

We know how important family is, and how you’ll no doubt want to care for them as much as possible. At the same time, it’s not always easy to support your family financially if they suddenly find themselves struggling, either due to loss of their main income stream, or debt issues, or sudden illness.

Unlock a Cash Lump Sum With Equity Release

If your family needs financial help, equity release can unlock the money tied up in your home as a tax-free lump sum. It will be repaid from your estate when you die, so your family would get a lower amount than they would otherwise have been due.

Equity release can be a great way to help out your family financially, as it can give them a lump sum immediately that is repaid from the estate they would otherwise have been due.

Read on to see how equity release can provide your family with financial support without scuppering your own budget.

Looking for other information on Equity Release? This guide has info on 'Equity Release is perfect if you need to help your family out financially' We have also writen extensively about:

• - How to I start with Equity Release?
• - What are the alternatives to Equity Release?
• -Equity Release is perfect if you have retired recently
• - Equity Release is perfect if you need a cash lump sum

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Equity Release: Early Access to Your Estate

Essentially, for your family, equity release can work like early access to your estate. An equity release loan will see you paid a cash lump sum, to be repaid only when you pass away or move into full-time care.

It means you don’t need to personally make any repayments and instead, the money is either taken from your estate, or you’ll have pre-sold your home to the lender if you chose a home reversion scheme.

This means that you could be in a position to gift your family a large amount of money to help them immediately, without personally suffering financial loss.

The downside is that you won’t get the full value of your property in your equity release loan, and interest is compounded for the duration of the time you borrow, so the estate you pass on to your loved ones will be worthless, potentially up to the full value of your home even if you only borrowed a fraction of its worth.

With that in mind, you’ll need to sit down with your family and decide on the best course of action. As part of any equity release loan, you’ll also need to spend time with a financial adviser, so it makes sense to visit one collectively with your family.

The adviser would be able to look at the finances both of yourself and your loved ones and help to suggest the best course of action.

Equity Release: Repayment of Interest

One option you may wish to consider when gifting family money from your equity release is a loan where you can repay interest. Most lifetime mortgages don’t include repayments but if you choose, you can pay this down so that when you do die or go into care, there’s only the original cost of the loan to repay.

You could set up an agreement with your family that they’ll make the repayments once they’re back on their feet, but they won’t be able to be written into the contract to do so.

It would be an informal agreement, so don’t set up interest repayments if you’re not sure if your family will cover the costs, unless you’re happy to be liable.

If you think an equity release loan could help you support your family for whatever reason, our guides to Equity Release pros, cons and process will help

How Can Money Savings Advice Help You With Releasing Equity?

Here at Money Savings Advice, we have partnered with some of the UK’s leading Equity Release brokers. They have already helped thousands of people get the best Equity Release deal and they can do the same for you.

Choosing an independent adviser means they won’t recommend a scheme unless they are sure it is in your best interests. Their advice is also regulated by the FCA, which gives you an additional layer of protection.

If you would like to speak to one of these brokers who can provide you with a ‘whole market quote’ then click on the below and answer the very simple questions.