Are you thinking of completing a home improvement project and you are looking at equity release to fund your renovations?
There are many reasons why you might want to renovate, extend or upgrade your home. More space, to accommodate a growing family or to create a self contained living space for a relative. If you have lived in your existing home for many years, perhaps decades, the prospect of moving may be just too much of a challenge, not to mention the cost and disruption. Here are just a couple of home improvements that you could consider:
- An extension or conservatory
- A new kitchen or bathroom, or even an en-suite
- Transform an outdoor space
- Undertake adaptations to your home
- Improve the energy efficiency of your property
One of the ways that you can do this is to use equity release to fund the project. But what is it and how does it work? The next section will explain everything you need to know.
Equity release allows anyone over the age of 55 to access equity (equity is the difference between what you paid for the house and how much it is worth now) in your home as either a lump sum or as a series of smaller amounts.
There are two options for equity release. The first is a lifetime mortgage which is where you take out a mortgage secured on your home if it’s your main residence. The second is called a home reversion which is where you sell all or part of your home to a reversion provider in return for a series of regular payments or a lump sum. You have full rights to continue living in your property, but you must insure and maintain it.
If you decide to take out a lifetime mortgage which is often the most popular method, there isn’t a fixed term date like a traditional mortgage when you have to repay what you borrow. The rate of interest will not change either. There are lots of things to think about when it comes to equity release and whether it’s the best option for you will depend on your own personal circumstances and things such as your income, age, the amount that you would like to release and future plans.
So, if you are thinking of a large home improvement project such as a loft conversion or an extension, you now have another option that you can consider to fund the project.