What is equity release?
Equity release is a way of releasing cash from your home without having to move. You can borrow large amounts of money and pay it back in instalments over time. Equity releases can even be available to you if you are still paying off the mortgage on your home.
Not only can they benefit homeowners, but you could use them to help others. Will Hale, who is the CEO of equity release specialist Key Advice says that “Big ticket items like repaying outstanding mortgages, managing unsecured debt and helping family members get their foot on the property ladder is what motivates customers.”
Passing it on to your family
You can pass the loan down to family members to help them get on the property ladder. The housing market can be tough, and it can be hard for young people to make the money to buy their first home. Especially finding a house or flat that can be used as an investment is often not easy to do if you are just starting out in your career or have to think about supporting a family. By passing on the loan to a family member you could help them make their first property investments.
Help fund a business
You could give it to family members to help them fund a start-up business. Many people are setting up their own businesses and often this doesn’t require as much money as it used to. Businesses may be able to start selling products or offering services through the internet without investing large amounts of money, making it easier to support new business ideas financially with a loan.
Help someone pay off their student loans
University students may have to take out expensive student loans during university to fund their studies. Repaying the loan can take away a significant portion of their income after graduation, placing an extra burden on them. By helping someone you are close to pay off their student debt you can make things a lot easier for them.
Supporting a charity
There are many ways to help someone who is struggling financially. Charities offer ways to help people in difficult situations, but often a large portion of the money that is donated is used by the charity organisation itself. Supporting smaller charities and organisations that have received positive feedback can be another great way to help others by taking out an equity release.
Equity releases are a popular way to secure loans during difficult times, but it is important to only consider taking out a loan if you are sure that you can pay it back.