Christmas is always portrayed in the media as a magical time, where families get together, exchange gifts and enjoy plentiful food and drink with seemingly no cares in the world. As we all know this is very rarely the case.
The cost of Christmas seems to increase every year. New grandchildren seem to appear at an exponential rate and the cost of getting everyone round the table all at once also seems to add to the general stress levels.
In the past, some equity release companies have used this period of stress to actively promote their products as a way of getting through Christmas. This should trigger alarm bells in the back of the mind, as a lifetime mortgage or home reversion plan is usually not the best solution to, what is essentially, a short term funding problem.
Remember that Christmas only lasts a few days, whereas a lifetime mortgage will, like the label says, last for the rest of your life.
Equity Release does have its place. But that place is a life transforming one. Children can be placed on the housing ladder with help from a lifetime mortgage. Grandchildren can be put through university without crippling student debts.
Existing repayment mortgages can be paid off and relatives in Australia can be visited. Lifetime mortgages should be life changing in some small degree, and funding Christmas is in all reality, something that comes around every year.
Unless you want to spend Christmas on a beach in New South Wales with the daughter you haven’t seen for ten years, then Equity Release should be left alone. At least until you want to change your life or the lives of your family in some way.
A lifetime mortgage is a mortgage on your home that you do not have to make monthly payments on, and does not need to be paid back until you pass away or go into long term care.
The uses are there, and it is becoming increasingly mainstream, with some high street lenders announcing that they want to launch their own products in the New Year. It will affect the amount you leave to your family in your will though, and it may affect your entitlement to means tested benefits. With this in mind it is always best to speak to an adviser before making any long term decisions.
We at the Equity Release Information Centre are always available to give advice on whether or not this type of plan will be right for you or your family. If you have any questions feel free to give us a call on 0800 077 6885 or visit our website at www.AskEric.tv.
We have a free guide to equity release that is available on request, or to download on our website. If you have been advised to take on such a plan to get through Christmas, give us a call to see if there are any other alternatives available.
Until then, have a very Merry Christmas and a Happy New Year from all of us at the ERIC team!
These are equity release plans. To understand the full features and risks please ask for a personalised illustration.
Image courtesy of Kris de Curtis on Wikimedia Commons
