As mortgages become harder to come by, the impact is being felt in the equity release market.
However, this form of releasing cash from your property is now benefiting from the mortgage downturn.
Equity release schemes are managing the various forms of borrowings in retirement & being used as the tools of choice to redeem outstanding debts.
More equity release customers are now unlocking cash from their homes in order to repay their existing mortgage. This has now become the main issue for people over 55 to take out equity release schemes.
These mortgage repayments have come about via the use of both lifetime mortgage & home reversion schemes.
The majority of equity release clients will be using a lifetime mortgage scheme as their method of repayment, given the fall in house prices which affects the home reversion market to a greater extent.
Another reason that has recently come to the fore in the equity release market is for homeowners to take out an equity release plan to provide financial support for their family. This maybe reflective of the number of first time buyers struggling to get on the property ladder in a difficult mortgage market, which are therefore turning to their parents for help.
Loan & credit card repayment is another popular reason cited by equity release customers for accessing some of the value in their homes.
Having outstanding debts can eat into a retired person’s income, especially at the moment with interest rates impacting on returns from savings, so clearing any debt which has extended into retirement can make a significant difference to their income.
For further advice contact 0800 783 9652
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