Unlocking the cash in your house

Generally no payments are made but interest is charged on the mortgage, with typically the accumulated debt being paid off when the house is sold. This normally occurs when you die or when you are no longer able to live in the property.Most equity release mortgages are suitable for the over 55s and used to improve people’s lifestyle. This could include them having more money to spend on home improvements or just going on holiday more often.

But if you don’t need any money for the items mentioned above I would not rule out lifetime mortgages as they do have another use as they can be used to assist with a purchase of a property.This facility could be very handy for people who may want to move nearer to their children but find that properties in those areas are more expensive. However, just because this is the case doesn’t mean that they have to shelve the idea of a move, as they could boost the amount they can pay for a property by using a lifetime mortgage. This would then allow them to have the retirement they wanted with the family. Other applications for using equity release may be that your house is no longer suitable for you, and you may feel more comfortable in a bungalow or sheltered accommodation. Again bungalows in particular are quite expensive in our area, and they can attract a premium price.

This may then mean that if you do sell your property that you may not have enough equity to move to a retirement property. However, the answer again could be equity release with lenders prepared to lend more than 50 per cent of the value of you new property, depending on your age, with no payments to be made.Overall I believe that although these deals could make an enormous amount of difference to many people’s quality of life they are not for everybody. Therefore I believe that if you are over 55 and wish to explore your options, it is worthwhile contacting an independent financial adviser to ensure you make an informed decision on whether equity release is right for you.