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Your home is usually your greatest tangible investment.

Your accumulating pension fund may or may not be worth more than your house value but once any lump sum is taken at retirement the rest is given back to you a little at a time over decades of retirement. So your pension fund is little help before or after retirement if you need short term cash to fund your lifestyle. That’s no so with your home. This asset can be used actively to turn some of its value into cash by “releasing equity” through some form of mortgage loan.

What are often called Equity Release Plans have little interest to Baby Boomers, most of whom are still relatively young and in work. These plans are aimed at the cash strapped elderly – the income poor over 70s – where effectively a share of the house is given up for cash either through an interest free roll-up mortgage or through a partial sale of the property ( a reversion plan).

Baby Boomers can use re-mortgaging or further advances as equity release

However for baby boomers in the 40- 60 age bracket equity release can still be a powerful tool in their financial planning. The difference is that this form of equity release doesn’t have to be permanent as with the over 70s but can be used as a form of “bridging finance” to meet short term lifestyle needs.

Equity in your property can be released through re-mortgaging where as part of the re-mortgage process the loan is increased allowing additional equity to be released for you to use. As mortgage usually switching makes financial sense anyway (see Saving Money on Your Mortgage) the further advance costs may not be as much as you think.

The keys to re-mortgaging for equity release are :

Choose the lender carefully.

Flexibility on the amount of lending is important. Lenders with further drawdown facilities are particularly useful if you don’t want to take all the cash at once. Consider also an Offset Mortgage here. *Examples >>* (In these links we can also introduce QLagoonproducts /deals /recommends as the site develops)

You may need to switch lenders again to maintain the best deals. (See Saving Money on your Mortgage)

Consider equity release ahead of when you need the cash.
Lenders are going to be more favourable to advancing more money when you have good income credentials. This may change later (eg if you wind down to retirement or become self-employed). So its worth planning ahead if you feel equity release could help you. An Offset Mortgage with drawdown facilities could be ideal in these circumstances. . *Examples >>*

Extend the mortgage term if this makes sense.
It may be that your current mortgage is set up to pay off quite early. If you have the income to service the loan and a strategy for repayment an extension of the mortgage term could make sense and give you more flexibility. You really have nothing to lose as you could still repay early if you wish. . Examples>>

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