Why Equity Release Could Be The Perfect Financial Foundation For Funding Home Improvements

Since the financial crisis in the UK, it is no longer possible to obtain mortgage with a loan to value over around 90%.

before the economic crash, this was the way the majority of people would make those long overdue home improvements or luxury holidays, it was simple enough, you've paid for your house, now let it pay for you. In the tough times of 2011, such mortgages are rarer than Faberge eggs.

However there are alternatives. If you are approaching retirement, there is another option that is available that will enable you to make substantial improvements to your home. These come in the form of "Equity Release" deals or 'lifetime mortgages'. These mortgages are a way of accessing cash to allow people of pension age to carry out home improvements, buy a new car or go on the holiday of a lifetime.

The idea behind equity release is that a lender takes part of the value of your home in return of the share of the proceeds when you eventually sell the property (often after your death). You can typically take either a monthly income or a lump sum. Normally, these remortgage deals are only available to applicants over the age of 60 but they do mean that you can live in your house indefinitely.

Once the equity is released, you can use the money to fund home improvements including a new kitchen or bathroom, installation of central heating or even an extension or conservatory. This can help you maximise the value of your property.

When you retire, jobs around the house may suddenly be more pressing. You may have been delaying home improvements whilst you were working but now have time to undertake all those repairs and other jobs.

You may want to have the windows redone, add a conservatory to spend your summer days or redecorate the property to increase the comfort in your home.

Redecorating is a very cost effective way to add value to your home, and is also an easy way to increase the attractiveness of your home to potential buyers if you decide to sell in the future.

Equity release can be an excellent way of raising the cash that you need to undertake your home improvements. Whilst remortgage rates can vary, it is possible to put a plan in place that will ensure you raise the funds you need whilst not committing you to a high monthly repayment that you may not be able to afford on your pension income.

As with any significant financial commitment it is sensible to seek the advice of a professional mortgage broker or financial advisor before committing to an equity release scheme. Qualified advisors can outline the various options open to you as well as searching the market to find the best remortgage rates or equity release deals. And, a broker may be able to establish whether you are eligible for any government funding which can help pay for your home improvements.


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Timothy Frodsham writes for JustRemortgages.com one of the UK's top sites for the latest remortgage rates and best remortgage deals.