What are the merits, and downsides, of releasing equity from your property?
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Partner at Pagan Osborne, responds to a letter on the matter:
I was interested to read the recent piece on the rise of homeowners turning to equity release in Wednesday’s paper (Finding the key to a happier retirement).
The same picture is reflected here in Fife as we have clients who are actively looking into the possibility of releasing funds from property. People can, in certain circumstances, use their home as a means to generate an increase in cash flow for a variety of reasons, such as retirement, or to help pay for renovations to their homes or gardens.
Whilst it can be an effective way to free-up cash, it is really important that people are aware of the risks involved as well.
By turning to equity release, this means re-mortgaging a property which will undoubtedly create a financial implication later on whether for yourself or those who you wish to leave your estate to in a Will.
If anyone was considering using this method to help fund a trip away, a new kitchen or to perhaps pay for the grandchildren’s school fees, my advice would be to make sure they seek advice from a trusted financial advisor who is trained and qualified in this niche area of finance.”