Equity release schemes are definitely ingredients in the personal finance maelstrom that more people are starting to enjoy the benefits of. This is because equity release allows people the chance to realise the value in their own home and put this home equity to more practical use and help with their everyday living standards. One popular trend that is gaining momentum recently has actually been the switching of the older equity release schemes in order to facilitate a better deal and future. If you wish to swap equity release plans there are fewer options available to you; however, it is still a choice.
Finding a Better Plan than the Current Option
To swap equity release plans you need to have an existing equity release scheme that has either become uncompetitive or your situation has now changed and further funds are required. Therefore, this is something that can be done, especially if you want to realise a different result from your current equity release scheme.
Here are some advantages to gain by swapping equity release schemes:
Lower interest rates: Because interest rates in financial services have fallen recently, this also means that if you swap equity release schemes, you could end up paying less interest over the long term. By paying less in interest and keeping more money in your estate, this is bound to be good news for the beneficiaries who are trying to save as much inheritance as they possibly can. It’s really important to do your research when it comes to comparing equity release interest rates.
Flexible features: Some equity release schemes have better features than others and this can affect whether or not you can have more cash released from your property. If you are looking for an equity release scheme that suits a change in your lifestyle, such as affecting your health or your family, it might be worth considering swapping to a drawdown equity release scheme. This can provide an initial payment, however, a reserve facility is also created which can be subsequently drawn down in the future.
Market Changes
The UK is certainly a country that has undergone a lot of changes of late. Unfortunately, two recessions have affected financial products and the housing market. It has ensured lowered interest rates are available, and the good news is that housing prices are on the rise again. Since markets can change, it is important to take advantage of these modifications for a better financial product. If you are worried that your current plan is going to take too much of the inheritance or you need more funding, going for a lower interest rate is a potential reason for swapping; however, do not change just for the sake of it.
Calculate the proposed changes you wish to make. Make certain the lower interest rate or flexibility of your plan is something that will help in the long run and not make things more difficult. Like other lifetime mortgage products there are costs to closing on a new loan. It could take away the potential savings you are trying to gain.
Swapping to Home Reversion
Lifetime mortgages can be swapped as long as they are paid off in full. If you fear having the mortgage to pay off at death or when you move out, then consider getting a home reversion. As long as you use this plan to pay off the current mortgage, you can obtain this product. You may not retain full ownership, but at least you have a place for the rest of your life. It can ease your mind about a payment later.
Speaking with an Equity Release Adviser
However, it’s important to note that not all equity release schemes are the same. There is bound to be complexity in establishing whether it is best advice to swap equity release plans. This is why you should definitely consider talking to an independent equity release adviser who can let you know about how to release equity and the options that you have available for your situation. The good thing about independent equity release advice is that you are able to get unbiased assistance on which equity release mortgage would be suitable if you are looking to swap equity release schemes.
Online tools that help you compare and swap equity release plans are good options for people who are unsure about how they should go about swapping plans, but also don’t want to leave all the research to an adviser. If you like to take financial responsibility in part for your own affairs, an online tool is an excellent way to start. One company that has an online calculator to assess whether it would be worthwhile to swap equity release schemes is CompareEquityRelease.com.
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