Equity Release Alternatives: Homeownership Without Mortgage
Alternatives to Equity Release
Many people are feeling the pressure of rising house prices, and a mortgage that is just too high. If you feel that your home has become too much to bear, then you might want to consider alternatives to equity release. Equity release can mean different things in varying circumstances, but it usually refers to borrowing money against the value of your property. These loans can be paid back with interest over time or repaid at once when you sell up and downsize.
The first alternative to consider is downsizing your current home. You might be able to sell it for more than the amount of your equity release loan, and this could help you buy a cheaper property and pay off any remaining debts with savings or by reducing spending elsewhere.
The other option is renting out your home while living in another one – although this will mean that you’ll need to cover two mortgages at once as well as utility bills, council tax and maintenance costs on both properties.
There are also leaseholds, which let people rent their homes without having large mortgage repayments but they come with strict restrictions so check the terms before committing to anything long-term.
Releasing some equity from your house can be an effective tool in getting some more funds for your costs of living, but the decision needs to be carefully considered. The main thing you should consider before taking any action is how much time you have left on a mortgage until it comes due and if there are any restrictions in place related to when an individual can access their pension pot. If those two points don’t apply to you then read on for more information about each alternative option!