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Updated by Roger Badeley on Oct 14, 2015
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5 Things to Consider Before Applying For Equity Release

For many people, equity release is becoming a popular method for raising cash in later life, but what options should you consider before signing on the dotted line?

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Downsize

Downsize

Be realistic about the size of the home that you actually need – could you do without that spare bedroom and would you actually prefer to have a smaller garden? Changing location can also mean that your monthly outgoings can be reduced without you having to compromise on losing too much space.

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Welfare

You may discover that you can claim other welfare benefits from the government – an increase in your monthly income may help you to become more financially comfortable and therefore reduce the need for you to release any funds from your home.

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Family

Family

Speak to your family – don’t leave them with any nasty surprises once you are gone. Chat honestly with key family members to make sure they are aware of your plans, as the amount of money they inherit could be affected if you go ahead with releasing some of your home’s equity.

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Independent Financial Advisor

If you still feel quite strongly that you wish to go ahead with releasing some of your home’s equity, make sure you speak to an independent financial advisor first. They will find out various options for you, and will identify any borrowing fees or potential penalties you may face should you need to move into a care home at a later date.

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Lump Sum or Monthly Payments?

Lump Sum or Monthly Payments?

Ask your IFA to look into the best method for the money to be released – do you need the funds as a lump sum, or would it be more practical to receive monthly payments? Monthly payments may be more cost effective, as interest is only payable on the cash you have taken.