Back when times were great, it seemed as if equity home loans and equity release mortgages flowed like water.  There was just an air of abundance that went along with the notion that the equity in your home could be tapped, much like a credit card (but with a much lower rate, that could be locked in).  But of course, some people went just a tad bit over board with it, taking massive cash lump sums and treating their equity home loans as if their houses were giant ATMs.  Unfortunately, not every homeowner realized that an equity release is not a toy to be trifled with.

 Obviously, when the recession hit its hardest, lifetime mortgages, equity home loans and equity releases became few and far between.  When every indicator of whether a person would pay what they owe is no longer valid, banks panicked and shut off the whole pipeline.  People with home equity loans did not even know where they should send their checks, because it seemed as though no one knew exactly who owed exactly what to exactly whom.

But that was then, and this is now.  It has been said that the only thing we will ever have to fear is the fear itself.  And this is as true in recent years as it ever was.  When banks took a moment to stop doing their Chicken Little impression, they realized that the sky was not actually falling.  This revelation seemed to do a little something to increase the confidence with which they were able to lend.

And this has been a boon to those who have been seeking an equity release.  A lot of retirees have been finding that while every day may be filled with “kicking back” time, medical bills have replaced tropical drinks on the beach as uses for the savings they socked away so faithfully.  The regular monthly income an equity release provides can be more than just a blessing for the short term.  In some cases, they might even be what saves your life.

If you require medication and happen to be in Medicare’s “donut hole,” you may not be able to afford the various medications that your doctor prescribes.  If you do not have the money, what can you do?  But when you access the equity that you have been putting into your home every month for all of these years, you suddenly have options.

While a lot of people think that “using your home as an ATM” is irresponsible, they generally hold to the belief that the only reason for an equity home loan or an equity release mortgage is to go buy a big TV.  Or perhaps they think you intend to take a cruise with your cash lump sum.  A simple way to shut them up is to ask how they would like it if they tried to draw a breath, and nothing happened.

Of course, no one suggests that taking out lifetime mortgages or equity home loans are the best option for every home owner.  But with reasonable caution and common sense engaged, they may be very useful options in this slightly less tense environment