What Not To Do When Releasing Equity
Choosing to release equity is a big decision. It can be difficult to make the best choice when all of your options seem like they have their own set of pros and cons. However, there are some mistakes you don’t want to make if you’re opting for equity release. These mistakes could prevent you from getting the equity that you need in order to live comfortably or get out of debt.
Don’t make too many small equity releases. Making a few smaller releases might seem like the best way to get what you need without making your home feel cramped, but it can end up being more expensive than larger single-release plans in the long run because of interest rates and penalties for early release.
Don’t take out equity on a property that has negative Equity. If you have to make payments after the release of your equity, it could mean that you’re paying more than what your home is worth.
Avoid taking out equity if you are in poor health or will be soon. You might not want to think about this possibility before making any decisions for yourself and your family, but no one can predict when they’ll experience unexpected medical problems as we age. This may result in needing cash unexpectedly early because of hospital bills, doctor’s visits, prescriptions etc… which makes a simple solution like an option such as lifetime income from reverse mortgage seem much less desirable once these issues enter into play!
Don’t forget to do your research on the broker you are planning to work with! You should check their credentials and make sure they’ve been qualified through a long-standing institution, like one of the following:
Don’t ignore other options for financing that might be available to you – such as a home equity loan from your bank or credit union which may provide more favorable rates than an option like lifetime income from reverse mortgage because it’s not backed by life insurance policies and can even come with tax deductions all while still giving access to cash in order to live comfortably now or get out of debt quicker if needed!