Equity release is a process that allows homeowners over the age of 55 to release tax-free cash from the value of their homes. The amount that can be released depends on factors like the value of the house and your age. You can take this equity release as a lump sum or even in smaller sums to help you with your financial needs. Here are some things to know about equity release.

Personal financial needs
You can use this equity release cash for any purpose you may like. This can include paying off any loans, making some improvements to your home, helping your children financially with any difficulties, buying a home for them, traveling the world, or simply having a safety net of extra cash with you that you can enjoy through your retirement.

Equity release mortgage steps
Here are some of the steps you should take when considering getting an equity release mortgage:

• One of the first things to consider when purchasing equity release products is getting a financial advisor on board. This advisor will be able to give you the details of how these products work and also evaluate whether you are the right candidate for such a product. You should also communicate with them honestly about your financial needs and wants, and based on the information, the financial advisor will be able to give you the right advice.
• The next step is valuation and an offer. You are usually advised to get an independent solicitor specializing in equity release to help you with any legal advice necessary. Once you have chosen your lender, you will coordinate with the financial advisor who helps fill out the application, and the lender will contact you to calculate or arrange for a valuation of your property. Once these formalities are done, the lender will draw up the offer and send the details to the solicitor.
• If you are happy with the offer, you can agree to the terms and conditions, and the money will be released to the solicitor. Now, depending on your arrangement with the lender regarding how you need the funds—in one go or in smaller sums—the solicitor will release the money to you accordingly.

These advisors and solicitors are essential, as they know these processes thoroughly and can wisely advise on moving forward with your financial goals.

Things to know
There are both pros and cons to getting an equity release mortgage loan, so always weigh your options. It is also wise to be aware of home equity loan interest rates and be up-to-date on that information. For example, the average interest rate for this is approximately 8.47 percent.

Some of the advantages of equity release

• The money that is released is entirely tax-free.
• You do not have to leave your home to get the release funds.
• There is no need to repay the loan until you move out of the house and into long-term care or pass away.

There are some limitations to this purchase loan, so always be careful. If you give the funds to someone in the family, they may have to pay Inheritance Tax sometime in the future. The equity in your house will reduce after the release, so make sure to do the calculations right and see if this option works for you or if there are any better financing options available.