A recent review of our customers found that 20% had chosen to release equity in their home to repay unsecured debt. Although people in later life can usually afford fixed outgoings such as food and utilities, things can get tricky when it comes to paying for luxuries or repairing household appliances. Often, the only solution is to cover the cost of such items with a credit card or personal loan, which can lead to more trouble if they struggle to make repayments on time.
While some people may look to remortgage as a means of clearing or consolidating their outstanding debts, this isn’t always possible, not least because being accepted for a mortgage – or remortgage – depends on you satisfying a lender’s affordability criteria. Ultimately, you have to convince the lender that you can afford to pay for the mortgage, both now and well into the future. This is quite difficult when you get older, especially if the state pension is your sole source of income.
With equity release, there are no affordability checks, and you can choose whether or not you pay back the interest on a monthly basis. By unlocking the equity that’s tied up in your property, you’ll be able to release a lump sum that can be used to purchase that new car, washing machine or dream holiday, safe in the knowledge that you don’t have to pay for it straightaway. Indeed, repayment isn’t usually required until a property is sold upon the owner’s death, or when they move into long-term care.
Of course, an elderly person could turn to their family for support, which may help them avoid paying any interest on a loan or mortgage. However, many people over the age of 55 are too proud to ask their children (or grandchildren) for financial support – or their family are simply unable to help them. Again, the alternative might be a remortgage or other form of secured finance, but that can present issues with affordability, not to mention the danger of your house being repossessed if you fail to make repayments.
At Premier Equity Release, we understand that debt isn’t the easiest thing to talk about. However, getting to grips with a customer’s financial situation is the first step to helping us find a solution that suits their circumstances. Every meeting we have with a client is strictly confidential, and we encourage all customers to be as open and honest as possible, with the promise that we’ll provide impartial and honest advice in return. Indeed, if we believe that equity release isn’t the right option for you, we’ll have no hesitation in telling you. We’re never judgmental – on the contrary, our job is to lend a sympathetic ear and provide a sensitively managed process that provides people with the necessary peace of mind.
If you’re looking to repay existing debt using the equity in your property, or require some impartial advice, feel free to get in touch with Premier Equity Release today. We can offer you the expert guidance you need to make a well-informed decision.