Saving is not an option but a necessity. You should make it a point to spend after you save and not the other way round. But even if you maintain this rule for all your life, there are some times and situation when just your savings cannot bail you out. You can take up personal loans if you are still employed and have the security of monthly salary. But if you are retired, such financial crunches can pose a huge problem especially if your pension amount is meager or if you do not receive pension at all. Do not worry, if you have been farsighted enough to have bought a property while you were still working or if you have been fortunate enough to have been left one, you can opt for home equity release.
Most people when they are faced with a financial crisis after retirement either give up all their savings or if they have a property, they sell it or mortgage it. Neither of the options is practical since giving up all your savings will leave you penniless and selling or mortgaging your property would leave you homeless. Home equity release would take care of your financial crunch without leaving you penniless or homeless in the process. The concept of home equity release is much like mortgage but there is a big difference between the two that makes the former a much practical option for retired people. You get a loan based on the valuation of your property like mortgage, but unlike mortgage if you cannot repay your loan ever, you do not need to give up on your property. You can call your property your own for as long as you live and after your death, only after paying your beneficiaries the remaining amount of your money will the property be taken by the company you have taken the home equity release loan from.
And this is probably the only disadvantage of home equity release; you would not be able to leave anything for your beneficiaries except the remaining amount of the loan, if any. Hence this policy is more suited for people who do not have anyone to leave anything to. Even if you do not face any financial crunches, you can opt for home equity release and utilize the money to spend the rest of your days in enjoyment, doings things you always wanted to do.
Rating: 5 out of 5