Equity release schemes are becoming an intrinsic part of retirement solutions in the UK for people over 55 years of age. It is a financial product that releases tax free cash from an individual’s property.
However, the amount released depends upon the age of the applicant and the value of the property. The older you are, the more that can be released from the property. Likewise the greater the property value the higher the amount that can be raised from the property.
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Another factor that can affect the amount that can be released via equity release is one’s current health situation. With some equity release schemes if have poor health then the lender can class this as an ‘impaired life’ application & thereby offer potentially better rates. This can result in a higher percentage of the property value & consequently a larger lump sum for their age.
Some crucial advantages of the equity release schemes:
• No need to make any monthly payments
• You can continue living in your property for the rest of your life
• The debt is only repaid when you sell the property
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What you can do with an equity release scheme:
Home reversion
With a home reversion, a financial company purchases a share of your home. When your home is sold, the company takes its profits. The reversion company can purchase anywhere upto 100% of the property value. You then receive a lifetime tenancy, rent free for the rest of your life.
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Home income plan
With a home income plan, the equity release company releases a tax free lump sum from your home, which then can use to provide a regular income by purchasing an annuity. This income is then paid for the rest of your life.
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Lifetime mortgages and interest-only mortgages are other alternatives that should be considered when making a decision on whether an equity release schemes is right for you.
Depending on your personal circumstances and the way you wish to live out the remainder of your retirement will help determine which equity release scheme is right for your requirements.
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For more information on how equity release can help you call 0800 783 9652 or email mark@equityreleasesupermarket.co.uk
