If your in retirement & facing financial difficulties then equity release can be one of the solutions to resolve your problems. These schemes provide additional money that can improve your life.
Equity release schemes are specially designed for homeowners who are over 55 years of age and have little or no mortgage remaining on their property. By opting for equity release schemes, you can release part or all of the value of your property and enjoy your retirement life.
Before applying for equity release plans, it is important to know how much money you can release against your property. The cash or income depends on factors such as value of the property and age of the applicants.
By opting for equity release schemes, you can enjoy several benefits such as:
- Increase your income
- Pay off outstanding debts or mortgages
- Pay for home improvements
- Buy a new vehicle
- You can also buy a second home
If you have decided to apply for equity release schemes then ensure you obtain the services of an independent financial adviser who will provide assistance in fulfilling your objectives.
Equity release plans are categorised into two main types – Lifetime Mortgages and Home Reversion Schemes.
X
Lifetime Mortgages – This kind of equity release scheme allows the homeowners to retain ownership of their homes and release the equity tied up within it. One of the new features about these schemes is that you can take the cash in installments, rather than all in one lump sum. This type of lifetime mortgage is called a drawdown equity release scheme.
By taking the cash in stages rather than all upfront will result in less interest being charged. This is due to the fact that you are only charged interest on the initial & subsequent amounts as you take them. This will be more beneficial for your children as less interest is charged & should mean a greater inheritance for them. Additionally, by paying less interest will mean a potentially lower balance, resulting in greater equity available for use in the long run.
This is opposed to taking the equity release all in one lump sum whereby you will be charged interest on the full amount from day one. This means the compounding effect of the roll-up of interest will mean a higher balance in the future & less equity eventually available.
X
Reversion schemes – By opting for this scheme, you (the homeowner) can sell a proportion of your home to the home reversion company in return for a tax free cash lump sum. Again some schemes will alllow you to take the cash in installments or more commonly by a single lump sum.
X
From the above mentioned options, you can choose the one which suits your requirements. It is recommended to gain advice from equity release specialists such as Equity Release Supermarket prior to making any major decisions.
X
