Your parents have been there for all life’s big events: your first day of school, your first heartbreak, passing your driving test. Maybe they even paid for your first car?! This generation of parents has provided more financial aid to their children than any other before them and have lived through a time when the financial landscape has gone through tremendous changes.
Financial challenges in later life
Retirement is an exciting time, with newfound freedom and opportunities to look forward to. Unfortunately, many people discover that their pension is not quite enough to live off and find that they have to sacrifice their quality of life. Money also being tighter often means that they don’t have enough savings to deal with unexpected life events. All of this can bring uncertainty about the future and mean that they can’t fully enjoy retired life.
Finding financial freedom
Of course, financial stress isn’t the only reason why someone would want to take equity from their home. People use extra income to fund all sorts of exciting things, such as:
- taking the holiday of a lifetime
- home improvements
- repaying a mortgage, or
- helping family members.
Knowledge is power
Releasing equity from your parents’ home could free them from financial worry and help them make the most out of their later years. Whatever their reason for considering it, it is vital that both you and your parents understand all the potential risks, as well as the benefits. Being part of the journey from the beginning will allow you to support your parents to make this life-changing decision.
Equity release won’t be the right choice for everyone, so it’s important to speak to a professional. In fact, it is a regulatory requirement that you take advice from a qualified equity release advisor.
How it works
The most popular form of equity release is through a lifetime mortgage, which allows homeowners over the age of 55 to receive a loan that is secured against their home. There are five different types of lifetime mortgage, each with different features to suit different needs.
With each option:
- The money received is completely tax-free
- No monthly repayments are required
- Your parents will retain 100% ownership of their property
With life expectancy increasing and the cost of living getting more expensive, lenders are offering more competitive deals and flexible options for later life lending. There are also regulations in place to protect homeowners from losing money. The ‘negative equity guarantee’ means that even if the value of your parent’s property decreases, they will never owe more than they borrowed or pass on debt to their family.
A new lease of life
Equity release could be life-changing for your parents, lifting the weight of financial worry and giving them security in later life. It could empower them to embrace retirement and do all the things that they have dreamed about doing.
We’d be happy to answer any questions you might have
We always welcome family members to meetings and will give you honest advice that you can trust.
For a free, no-obligation chat to find out more about an AskERIC equity release get in touch using the options below:
Speak to an advisor
Call our freephone number – 0800 077 6885 – to talk to one of our advisors.
Request your free guide
Please fill out our contact form to receive your free, impartial guide to equity release.
How Much Can I Borrow?
Click here to fill in our equity release calendar: provide us with your age, what type of property you own and your property value and we’ll calculate your Equity Release estimate.
Our honest and dedicated advisors want to help you to fully understand how equity release works. Please read the below, and contact us to find out more.
Equity release may involve a Home Reversion plan or a Lifetime Mortgage which is secured against your property. Equity Release requires paying off any existing mortgage or secured loan. Any money released, plus any accrued interest is repayable upon death, or moving into long-term care. Please be aware that equity release will affect the inheritance you leave and may have an impact on your entitlement to means-tested benefits both now and in the future. To understand the features and risks ask for a personalised illustration. Only if you choose to proceed and our case completes would a typical fee of 1.5% of the initial amount released be payable.