Where you have a variety of products available to you, it is a wise move to compare the features and benefits of each.
When it comes to releasing equity from your home, there are numerous options on the table and comparing them will help you determine the most suitable product given your personal circumstances.
In order to compare products effectively, you need to focus on particular features. It is also a sensible move to seek independent financial advice before you commit yourself to a particular product.
One of the features you need to scrutinise is the way in which you can receive the funds. Do you want a single lump sum or would you benefit more from withdrawing small amounts of equity as and when you need to?
The issue of monthly repayments is also an important one, as is the option to make monthly interest payments.
It is also important that the scheme you ultimately decide on has a no-negative equity guarantee to ensure the deal makes sense for you.
A common misconception surrounding equity release products concerns the issue of home ownership. Lifetime mortgages and drawdown plans guarantee you remain owner of your own home, however, a home reversion plan will involve you selling a percentage of your property to a reversion company, therefore reducing the amount that you own.
Regulation is another issue you need to consider. Credible equity release providers will be regulated by the relevant bodies such as the Financial Services Authority and those that are not should be avoided.
Most financial advisers will recommend that you take out a SHIP-approved equity release scheme for the fact that such plans come with various protections for you, the consumer.
When comparing products, you should explore whether they are SHIP-approved and avoid those that are not.
To be able to compare equity release products effectively, you need to understand the pros and cons of each option and the best way of finding these out is to speak to an equity release adviser.
As well as being able to advise you on the mechanics of each scheme, they can also compare products on your behalf and recommend specific products based on your goals and personal circumstances.
They will also be able to discuss whether equity release is in fact your best option or whether downsizing or seeking alternative forms of finance would work better for you, so it is important to speak to an expert before coming to any decisions.