An Equity Release Loan Can Be Used to Pay Off Your Debts

As you reach your later life and you start to plan for retirement and how you’re going to fund the lifestyle you’ve dreamed of, you may be concerned about your regular budget, and how you’ll manage on a reduced income when you have bills to pay.

Can I Pay Off My Mortgage With Equity Release?

You can use equity release to pay off the remainder of your mortgage, or to clear any other debts, so that your monthly outgoings are reduced.

If you’re starting to struggle with your mortgage payments or you’ve got unsecured debts that are mounting, equity release can help bring your monthly payments down.

Read on to learn how equity release could be the solution to your mortgage or other debts.

Looking for other information on Equity Release? This guide has info on 'Equity Release is perfect if you need to clear some debts' We have also writen extensively about:

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Equity Release: No Need for Immediate Repayments

The major benefit of equity release is that it lets you unlock the money you’ve got tied up in your home, without having to make immediate repayments on the loan you take. It’s potentially a fantastic solution if you need financial support during your retirement, as you can enjoy the money you’ve paid into your home, and it’ll be repaid to the lender when you go into full-time care or you die.

Now as you budget for retirement, you might be concerned about how you’ll continue to pay off the remainder of your mortgage. Or perhaps you’ve got unsecured loans and credit cards mounting up, and you don’t think your pension will cover the cost of the contractual payments.

Equity Release: Cash Lump Sum

That’s where equity release could help. By taking a cash lump sum through either a lifetime mortgage or home reversion, you could pay off the remainder of your standard mortgage or clear your unsecured debts, and potentially still leave a bit of money left over for you to enjoy.

There’s no need to worry about a poor credit history affecting your acceptance rate – most equity release lenders won’t be interested, because the loan is secured against your property. They’ll be guaranteed to get the money back either from your estate or, if you choose home reversion, by selling your house as they’ll then own it.

Equity Release: Immediate Repayments

And since you won’t need to make immediate repayments, your outgoings column on your budget spreadsheet will suddenly look a lot lighter, and your overall monthly living costs will decrease.

There are downsides to equity release, mainly the impact it has on the value of your estate. Not only will the original loan need to be repaid once you’re gone, but interest will compound for the duration of your life, and it could be costly.

However, rather than downsizing, equity release lets you stay in your lifetime home without taking on more repayments in the short term. You get to enjoy the house you’ve worked hard to live in, and make your budget much more manageable during your retirement.

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.