Have you ever dreamed of travelling the world but were uncertain about cash? With an equity release plan, all your travelling dreams could come true.
Taking a long-awaited holiday can be stressful when you do not have the funds to travel. Many people who retire use an equity release plan to fund their travelling dreams without worry. Take a look below and see how equity release can work for travelling and how to avoid these equity release providers and high-interest rates.
How does Equity Release work?
Equity Release is essentially a loan that you apply for against the value of your house using the help of a broker and a solicitor.
There are different equity release plans that you can choose from to suit your lifestyle. A broker will discuss them with you and help you decide which will work best for you.
Jason Stubbs, an expert in equity, releases advice on thorough research to find the suitable lenders and the lowest interest rates.
What Are the Requirements for Releasing Equity From Your Home?
The requirements for equity release are that you are 55 or older, a permanent resident of the UK and living in the house for at least 6 months of the year.
How Can Equity Release Be Used to Fund Retirement?
You can use equity release in many ways to fund retirement.
You can use it to pay off old debt, go on a much needed holiday or purchase another property.
Many people also use their equity release to pay a monthly income when they are fully retired to solve cash flow issues.
A Long Trip or a Series of Short Trips
Whether you choose to go on a long trip or a short trip, there is no particular way that you need to spend your equity release.
You could even choose to go on a few different holidays in different locations and other times.
What Kind of Holidays Can You Take?
The Kind of holiday you want to take is entirely up to you.
Cruise ship holidays are popular with retirees because of the facilities on the ships and the locations you can cover in one trip.
Road trips or travelling by plane are also allowed if you wish.
Can I Use the Equity Release to Buy a Holiday Home Abroad?
You can use equity release to buy a home abroad, provided that you spend at least 6 months in the UK.
The equity release is taken against your UK based property and will need to be maintained for the legal agreement to be relevant.
Once you have completed paying your equity release, you will be allowed to spend more time in your holiday home.
The Risks of Equity Release
As with all things about money, some risks are involved with releasing equity. Let’s take a look at those and how to avoid them:
- The first risk of equity release is taking out equity that you do not need. You could end up in debt with high-interest rates. You could also lose your home.
- You could harm your state benefits if you release equity. The government sees state benefits as necessary for low-income residents, and equity release proves that you can afford your lifestyle without state benefits.
- No-negative equity only applies to the lender supported by the ERC and can be waived if the lender has high-interest rates and is not a member of the ERC.
What’s the Next Step Forward?
Travelling and fulfilling your dreams of seeing the world can be a valuable experience that you may never have the chance to see unless you release equity.
It’s always important to discuss your equity release plans with your family and children before making any decisions.
Consult with an ERC registered broker and ensure your lender’s also a member of the ERC before settling with their services.
