There is nothing wrong with obtaining an equity release loan if you understand the loan and you need the money soon. The problem is that you will tie your property to this loan. When you die, your creditor has the sole right to sell the property and deduct your loan from the sale value. You take that right away from your children. You also cannot pass on the entire property as an inheritance unless your children could afford to pay the loan when the time comes.
Although the ease of getting a loan makes it an ideal option, you might have to suspend your plans.
You still need to gather more information
You might only know about this loan because you came across it online. If not, your friend might have told you about some details. Since you still need to read more, it is best if you suspend the plans first. You can revisit the idea later when you are sure that it is the best option for you. Besides, you can find different equity release schemes. You need to understand the differences first before you finalise your decision.
Your children are against it
Do not surprise your children with your decision to obtain this type of loan. They need to know your plans so you can see their perspective. You do not want them to get angry later since you decided to sell the property without informing them. They might be against it because they know there are other ways to obtain loans without putting your property on the line. They might also question the reason for obtaining the loan. For instance, if you decided to get the loan for investment purposes, they might advise against it. They know that you are already old enough to wait for your investment to grow. Unless you and your children can agree, it might be better to forget it.
You are yet to find the right company
Various equity release firms have rules regarding their loans. Some of them are quite stringent with the policy, and you might not think they are fair enough. If you are unsure that the loan will benefit you, it is best to pause first. You can look for other options that might be fairer for you. Better yet, you can seek help from equity release advisers who will clarify the information you need to know. They understand how this type of loan works, and they will tell you everything before you decide.
You found other loans
The primary reason why you are considering equity release is that you find it difficult to obtain other loans. The requirements are too strict, and you know you are unable to repay them any time soon given your financial instability. However, if you find loans that are easy to repay and will not require collateral, you can consider this option first.
After going through these reasons and you still think that equity release is the best option, you should pursue it.
To read more on topics like this, check out the budget category.