Alternatives to Equity Release
The alternatives to equity release
As property values have risen considerably over the years you may find there are a couple of alternative means to raise cash through your home.
You may opt to do this because equity release is not available to you, or simply because you and your adviser have decided it’s a better option.
The alternatives include:
- Downsizing to a smaller property
You could opt to sell you current home and either buy a smaller, and so cheaper home in the same area, or purchase a similarly sized property in a cheaper area.
Doing this would leave you with the difference between the sale price of your old property, less any outstanding debt secured on that property, and the purchase price of the new home you’ve purchased.
The downside is that you will not be able to continue living in your family home.
- Taking out a low cost mortgage
If you have enough income to service mortgage repayments you could take out a low cost mortgage on your property, releasing some of the equity built up in your home without having to use a more expensive equity release product, while continuing to live in your family home.
The downside to this option is it will only be available to those who can prove that they have the means to service the mortgage.
- Getting help from family or relatives
If appropriate it could be an option to sell part or all of your house to a family member and then pay them rent and continue to live in your property. The legal and tax issues of doing this would need to be considered carefully.
- Renting out a room
If your house is a sufficient size and it is something you are comfortable doing you could gain extra cash by taking in a lodger. You would need to consider any possible tax implications of doing this as well as accounting for possible periods where you are unable to find a lodger.
It’s important when considering equity release that you involve an independent financial adviser. These alternatives as well as the rest of the process can be discussed in detail with one of our specialist advisers, the initial consultation is free and you will receive advice and recommendation on the options available to you.
If you’d like to know more you can call 0800 531 6027 or request a call back at a time that suits you.
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