Equity release is a form of mortgage, which allows homeowners who are older than 55 years to release some equity from their property. This scheme is perfect for people who have no or little mortgage and want some more money to improve their lifestyle. If you own a property and you are over the required age limit then equity release is an ideal option to raise specific sums of money.
One of the best features about equity release schemes is that they offer tax free money which can be used for various purposes.
First of all, any mortgage that current exists must be repaid from either the funds raised via the equity release, or from any savings that exist. It is obviously essential therefore that you seek independent financial advice to ascertain whether enough can be released in order to complete this.
The Equity Release Supermarket calculator can assist in this respect by working out the maximum release possible.
Once this assessment has been done once, the tax free lump sum can then be used to spend on anything. Thus, you could opt to use the money to pay for any home improvements or repay debts such as credit cards or loans which can then be cleared immediately. There are many people who buy a second home or motor homes including caravans with this money.
You can even choose an option through which you will receive the money on a monthly basis, similar to a monthly wage or pension. This equity release scheme is beneficial for people who want to improve income in their retirement.
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If you have decided to opt for equity release then you should know more about two types of equity release schemes:
Lifetime mortgages – This type of scheme is known to be a secured loan which requires to be paid back only when the property is sold.
Home reversion plans – This scheme allows you to sell some or all of the property in exchange for a proportional amount of money. By opting for this type, the property does not 100% belong to you, but you can live in it as long as you require by acquiring a lifetime tenancy in the property.
Out of the above mentioned types, you can choose the scheme which best suits your financial requirements.
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Always seek advice from an independent equity release adviser - call 0800 783 9652.
Tags: Add new tag, equity release, Equity release calculator, equity release schemes, home reversion, home reversion schemes
