Leicester Swing Dance Society

Property equity release schemes have become popular around the world for those people who have these options open for them and at their disposal. However there are several disadvantages of these equity release schemes based on their nature as well as the regulations and the prerequisites that an individual should first meet to qualify or bee eligible for a particular scheme.

This is the reason why one must seek proper equity release information from qualified professionals in the field to ensure that one gets to benefit from the best equity release arrangement or suffer the consequences of the ignorance to this. Some of these disadvantages and shortcomings may be listed as follows;

·    Equity release services are not available to every Dick and Harry, you must, as a legal requirement in the United Kingdom, have attained the age of at least 55 years. This is true to the basic lifetime mortgage scheme, while the home reversion scheme will require five more years on top of this. This excludes other persons who may be interested in these arrangements but are below the legal age bracket.

·    You must as a principle, be the rightful owner of the property in which you want to use as the security against the amount of money you want. This must be consistent with the actual value of the house. In most cases, the value that will be calculated will not exactly reflect the actual value of your house and this may mean that your overall returns will not match the actual price of your house. This may not be true if you decided to actually sell your house. It would have fetched more in the market.

·    Due to the fact that there is no repayment to be done during your lifetime, there is a danger of misusing these equity release resources and therefore squandering what you have worked for when you were young, leaving a very bad financial picture and precedence to your own beneficiaries. It is not a very good way of spending what you saved.
·    In the sense that you will be spending on the house when you are still alive; and when you die the house will be sold, there is a risk of dying earlier than expected and therefore getting a very low value on your property. Selling it would have been better in the short run.

There is therefore a need to seek expert advice on other options available, whether you really need this arrangement or you can still do without.