EQUITY release solutions have been used by thousands of Australians to access the equity in their home without needing to sell or downsize - but the concept still attracts many myths and misconceptions.
The term 'equity release solution' normally refers to any strategy allowing homeowners to access the equity in their homes, without needing to sell and move.
While selling and moving home may 'free up' some equity, the challenges and costs associated with selling one home to buy another often counteracts the benefits of selling in the first place.
Equity release solutions come in a few different forms, the most popular being the debt free equity release solution - Homesafe Wealth Release™.
Some most common equity release myths and misconceptions include:
Myth - you may lose your home:
Your home should never be at risk with an equity release strategy.
In fact, equity release solutions should provide an older homeowner with the ability to stay in their home as long as they wish. Under a Homesafe Contract you retain ownership over the home and retain complete control over when you choose to sell.
Myth - you won't be able to leave an inheritance: This is an understandable fear given the equity release horror stories out there (which mainly involve compounding interest working against a homeowner for far too long).
It's possible to protect a certain amount of equity in the home via a Homesafe Wealth Release™ Contract. The agreement provides peace of mind regarding how much equity remains protected for your family into the future.
Myth - I can't access equity release because I still have a mortgage over my property:
Having a mortgage remaining over your property does not prevent you from enquiring about equity release products.
In fact, many people use an equity release transaction to payout their mortgage once and for all. This is a powerful strategy because it may free up more income for the things that matter.
Misconception - Equity release is a reverse mortgage:
Most equity release stories focus on reverse mortgages or the government's Pension Loans Scheme. These products are similar because they both act as a loan and charge compounding interest.
But it's possible to access the equity in your home without taking out a loan or a reverse mortgage, via Homesafe's unique debt-free solution.
Homesafe Wealth Release™ is not a loan or a reverse mortgage, but a way to sell a share of the future value of your home and receive the cash you need today*.
With Homesafe, a Homeowner enters into a contract to receive a payment from Homesafe now, in exchange for selling a share of the future sale price of their home. There are no repayments and they remain the owner of their home until they choose to sell.
For more information please call Homesafe on 1300 307 059 or visit our website homesafe.com.au
*Terms, conditions and eligibility criteria apply. Homesafe Wealth Release is available in 90 per cent of eligible postcodes in Melbourne & Sydney.