The Path to Financial Freedom
There are many debt solutions out there for people who want to get rid of their debts. One solution is equity release, which provides a lump sum payment (usually around 40% of the property’s value) as well as monthly payments until death or sale of the property. This can be a good option for people who have low interest rate mortgages and other large expenses such as care costs that they need to cover every month. Equity release can free up some cash from your monthly budget so you don’t have to worry about how you will pay off high-interest credit cards or loans with skyrocketing rates.
One thing to consider is that equity release is an expensive solution and, because it’s a lump sum payment, you can’t save any of the equity for later.
Another thing to keep in mind is that there are other solutions out there for people who want to get rid of their debts – namely debt consolidation loans: these allow borrowers to combine all of their debts into one loan with lower interest rates and monthly payments. Debt consolidation usually offers more favorable terms than equity release which should be considered as well before making your final decision about how to go forward with getting relief from your debts.
A Word of Caution: it’s certainly not for everyone due to the high costs and other drawbacks associated with equity release loans. Remember that there are plenty of things you can do before resorting to this type of loan – like getting a consolidation loan or even selling some possessions if necessary – so make sure you explore all your options first before taking out an equity release mortgage!
In Summary: Equity release is just one tool in what should be considered as a larger debt relief plan for those who’ve fallen behind on their monthly payments and need help getting out from under them.