Three Equity Release Dangers
While many persons in their retirement age may be thinking about equity release programs as a means of obtaining cash to enhance their living conditions, persons need to be aware of some of the dangers associated with the program. While it is good in some sense and can be advantageous, persons need to consider all aspects of the program.
Dangers of Equity Release Programs
1. If you choose to get a home reversion, the home reversion providers will only pay you approximately 20 – 60% of the value of your home. You will therefore not be receiving the full market value for your home. Irrespective of this, you will still be required to maintain the house and pay the insurance even though you have sold a part of the equity or all of the property.
2. In the event of a lifetime mortgage, the interest rate will be much higher than normal mortgages lowering the amount of equity that will remain after the property is sold. In addition, the larger the amount you borrow the more interest you will have to pay when the house is sold.

When the associated equity release dangers are considered, this method is more suited for persons who have no other options and who may not have children who would have inherited their property. If you have children who are secured, the dangers may not be much of a problem to you. The best thing to do before committing to these schemes it so get some equity release advice to help you make the right decision.



