What are the main uses for equity release funds?

Tuesday, 17 July 2012 03:54

Home improvements are popular

Raising finance in the current economic climate is far from straightforward, with traditional lenders closing their doors to all those without gold-plated credit ratings.

For many, this is a problem, however, if you are a homeowner over the age of 55 with a property worth in excess of £50,000, you have another option on the table - releasing cash from your property.

This is something increasing numbers of retirees are exploring and with equity release calculators easily accessible, you can ascertain how much money you could release from your home in a matter of seconds.

However, you should always seek equity release advice before committing to any products to ensure you fully understand what you are undertaking and that you are clear on what your options are.

As previously mentioned, increasing numbers of people at or approaching the end of their working lives are taking advantage of the value of their homes and releasing funds for a variety of reasons.

Recent research conducted on behalf of Saga has revealed the most popular uses for equity release cash.

According to the study, 56 per cent of those who used its advice service spent a proportion of the money they released on home improvements, with the average amount released standing at £10,000.

Another study from the organisation showed that more than 3.7 million people over the age of 50 want to make significant alterations to their homes, with 31 per cent keen on a new kitchen or bathroom, while 47 per cent want to modernise their property.

The second most popular use for equity release is to go on holiday, cited by just under one-third of respondents. Clearing debts was given as the reason by 32 per cent of people, while 24 per cent use the funds to purchase new cars.

Andrea Rozario, director general of the Equity Release Council, believes that for many, equity release is preferable to using their savings to fund such purchases.

She claims that savings are seen as being for a rainy day and that equity release is the most logical way to generate the money they need.

This research shows that equity release can fund a number of purchases and projects. Whatever you have in mind, equity release could be the answer to funding it.

However, it is imperative to seek independent advice to ensure it is the best option.

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