If you’re above the age of 55, you might have already retired and be living a free life without the shackles of work. Alternatively, you may have struggled with your finances and looked for a way to supplement your income. Sometimes, the government provided pension isn’t enough to cover the costs of running a large home, and family members may not have had enough disposal income to provide you with the money you needed.
If this was the case, you might have decided to take out a loan against your property as part of an equity release scheme. One of the biggest benefits of these loans is that you’re not required to make monthly repayments, as your loan provider will be repaid when your property is eventually sold.
However, if you took out your equity release plan with Northern Rock, are you sure you’re still getting the best deal? And are you convinced that switching to a different provider would end up being more costly?
You might be aware that Northern Rock left the equity release market following the 2008 global recession and was bought out by JP Morgan and subsequently Phoenix, with Papilio UK now overseeing and administering your plan. While your equity release from Papilio remains largely unchanged, interest rates from other brokers have fallen lower than those originally offered by Northern Rock, so you might be able to get a better deal by switching. You can read the full story here for more details.
Why you need the Best Deal
Equity release plans are ideal for many people because they provide you with the cash you need without requiring you to cover costly monthly repayments. They are also beneficial because they allow you to choose whether you want to receive the cash as a lump sum or as part of something that resembles an income.
In addition, if you took out a lifetime mortgage, the total cost of your loan will never be higher than the value of your property, so you won’t need to burden your loved ones with debt.
However, the total cost of the loan – given the fact that it’s considered long-term – will still work out to be rather expensive, and you probably still want to ensure your loved ones receive as much inheritance as possible.
In addition, you might need to move into a nursing home for full-time care at some point or another, and you’ll want to know that you’ll receive as much money as possible from the sale of your home to cover the costs.
For the reasons above, it’s a good idea to revise the terms of your loan and possibly switch to a new provider for your equity plan. You should choose a trusted company who will compare loans and terms from a range of different providers if you want to be sure you’re getting the best deal.