One of the main benefits of equity release is that you can withdraw money from the value of your home without having to leave it. If you’re happy with the size of your property and don’t wish to leave the area where you live currently (which is almost inevitable with downsizing), then this is a huge benefit. However, it tends to raise another important question; what if you want to move house?
The good news is that, yes, it is possible to move house after you’ve taken an equity release scheme. Whether you want to move closer to family or into a more manageable home, care facility, or simply decide later on that you would prefer to live somewhere else, most schemes will accommodate a relocation. Usually, the only requirement is that your new home offers adequate security for your equity release lender.
This can have a variety of implications depending on your scheme and the property you’d like to move to. For example, if your new home is worth less than your current property, you will probably be required to pay back some of your loan early (which may incur early repayment charges). Alternatively, you may have to give your lender a higher percentage of your new home, to match the value of their initial loan.
There may also be restrictions about the type of property you can buy. You may not be able to move to a dedicated retirement apartment or a very unusual property, as this can affect the ability to eventually sell it on the open market. Lenders generally prefer conventional homes without factors affecting who can buy them once you pass away or move into long-term care.
Before taking out any equity release plan, it’s important to speak to a professional advisor to help you understand how it might affect your finances and ability to move to a new house later down the line.
As a member of the Equity Release Council and part of The Right Equity Release Ltd (authorised and regulated by the FCA), I can guide you through your options to help you decide whether equity release is the right choice for you. Contact me today to arrange a free initial consultation to get started.