Equity release: 10 top tips

Key advice for those considering an equity release plan, courtesy of the Equity Release Council. 

 

Discuss your plans with family. They may be able to help or support your decision to take equity release.

• Do some research. Unbiased information can be found via the Money Advice Service Guide to Retirement and at equityreleasecouncil.com.

• Consider all your options. Make sure all state benefits are claimed, think about downsizing, possibly renting a room or family help. 

• If taking equity release to pay off an interest-only mortgage, speak with your existing lender to discuss all options they can offer.

• Discuss your plans with family. They may be able to help or support your decision to take equity release. 

• Do a budget planner to work out what your income requirements are and how this might change over the years.If equity release is needed for home improvements, check to see if the local authority offers any grants for the work required. 

. Don't take for granted what others tell you about equity release, make sure you speak with a qualified adviser who is a member of the Equity Release Council. 
 
• In addition, take independent legal advice. 

• Consider the type of equity release you need. An adviser will help you understand the difference between home reversion plans (where ownership is transferred to the lender at the outset), lifetime mortgages and the different types of plan. 

• Don't assume that the lowest interest rate is the best. The plans have various features, some of which may be more suitable. For instance, some allow you to make monthly payments to avoid the interest rolling up.