As you begin looking for financial solutions, you may find yourself feeling unclear about how to make the most of your assets. When you consider what your home can do for you in particular, uncertainty frequently comes down to understanding the difference between selling your home and equity release products.
The differences between those two options can be explained in three basic factors: time, estate and location.
When you are pursuing answers to your financial situation, time can be a vital influencing factor. A long, arduous process (as is often the case with selling a home) does not offer the quick turnaround in access to funds that some homeowners may be seeking. According to the Homeowners Alliance (https://hoa.org.uk/), the average time it takes simply to move from listing a home for sale to accepting an offer is around ten weeks. The overall process can take an average of six months to complete! By comparison, equity release is a significantly shorter process. On average, an application for any form of equity release takes four to eight weeks.*
*It is worth noting that, due to the coronavirus, timescales and valuation may be affected.
Equity release and selling your home can also differ in terms of what you will be able to leave in your estate. While selling your home does release the full value of your home to your estate, leaving more available to the person or people who will inherit it, it is unlikely that you will sell your home and not utilise some of the funds.
With that in mind, equity release does still create a value difference in what may be accessible in the future. How much of a difference this makes will be largely determined by your individual plan and which equity release product you purchase. When you speak to an adviser about equity release, you can discuss your priorities and plan ahead to ensure that you will be leaving your estate in a condition that you are happy with.
The number one difference between selling your home and utilising an equity release product is location, specifically, your location. Those of us in the Altrincham area know that leaving the Everyman Cinema, the easy access to the beautiful Dunham Massey estate, and our booming dining scene would be a last resort! That’s to say nothing of having to leave loved ones who live nearby.
Unfortunately, selling your home, even to downsize, can often result in having to leave the town you live in, as well as the memories built into the home you’ve grown in. This is when equity release can be a more fitting solution. The goal of equity release is to free up some of your assets while still allowing you to stay in the home you love.
Based on the above factors, selling your home and equity release are solutions best suited to very different scenarios. If you are pressed for time, would like to intentionally plan ahead for your estate, or want to ensure that you never have to leave your home, equity release may be the solution for you.
As with all financial solutions, we recommend speaking to an adviser to find a situation that fits you and your financial goals best. But if you are interested in learning what your home can do for you, please contact our team and we will be happy to create a plan just for you. Give us a call on 0161 711 0999.
A lifetime mortgage is secured against your home. To understand the features and risks, ask for a personalised illustration.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Equity release will reduce the value of your estate and may affect your entitlement to means tested benefits.
We do not arrange Home Reversion plans.