Potential equity release customers should not to rush into releasing equity from their home, even if house prices begin to fall, according to Daren Carter of In Retirement Services.
Carter says he is alarmed some press commentators have been recommending potential equity release customers to make their decision soon as house prices may fall in the near future.
He claims releasing equity before the money is needed is almost always a bad financial decision.
“For those looking to release the maximum possible amount of cash, releasing equity just a year ahead of when it is required is equivalent to a drop in property value of almost 5%; releasing 2 years early is the equivalent of a fall of over 10%”, explains Carter.
He also says those who do not need the maximum amount of potential equity could end up spending more in interest charges by releasing early than they would receive on the cash released.
“It is important to understand that equity release is a long-term commitment and any suggestion that people should rush into it is extremely dangerous”, says Carter.
“People need to make sure they go through the full advice process to find out if equity release is right for them and to get advice on how much they should release.”
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