The good thing about an equity release loan is that you do not need to worry about where you will get money to pay for it. It is a loan offered to seniors like you who are about to retire or already retired. Since you do not have a stable income source anymore like when you were still working, it is tough for you to get a loan. Even when you have tried applying to various loan firms or banks, you end up getting denied.
With equity release, your chances are high. The loan is only for people aged 55 and above. Therefore, you will receive loan approval as long as you have a property to tie to the loan.
The only downside is that the loan could end up racking up high interest. As long as you are alive, the interest continues piling up. Therefore, by the time you die, the amount might be very high. You worry that your children will not have anything left for them. Although it is quite an exaggeration, it is possible. It is even why the government implemented a no negative equity rule. It is due to the skyrocketing interest rates that left the beneficiaries with debts to pay.
Given this condition, you might have the urge to pay back the loan soon if you think you are capable of doing it. You want your children to inherit the property in full.
Determine if equity release is for you
Before you even take equity release, you need to assess your financial status. If you think you will eventually have money to pay for the loan, you do not require equity release. You can find other suitable options out there. As long as you can prove that you will eventually pay the loan, you will find appropriate loans to match your needs. You should only take equity release if you do not have an income source now and you know you will not have one any time soon, and you need a considerable sum of money, which is 20% to 50% of the total value of your property.
Read the terms of the loan
Equity release companies have different rules regarding early repayment. Most of them would make it close to impossible for you to pay the loan while you are alive. If not, these repayments would barely make a dent in the total amount borrowed unless you pay back the loan in full. If there is no point in paying the loan soon given these terms, you need to suspend your plans. However, if you think you have enough money to pay now and the terms will help you get out of this loan soon, you can pursue it. You can also seek help from equity loan advisers like the ones at http://www.55plusequityrelease.com/why-choose-us if you have no idea if it is in your best interest to pay the loan back quickly.