Posts Tagged ‘home reversion schemes’
Saturday, April 7th, 2012
Home reversion schemes have literally had their nose pushed out of the equity release market upon entering the year 2012. There has been a significant rise in the popularity of lifetime mortgage plans; including drawdown equity release schemes, enhanced equity release schemes & interest only lifetime mortgages.
Figures produced by SHIP (Safe Home Income Plans) show that home reversion plans now only account for 2% of the whole equity release sales. Drawdown lifetime mortgages popularity has captured 62% of applications & conventional lump sum equity release sales amount to 36%.
It is clearly evident to see the sincere lack of home reversion applications. Here we look at the mis- conceptions surrounding home reversion schemes & why they must still be considered in the overall equity release scheme of things!
First let’s look at the home reversion plan basics.
The home reversion scheme requires the property owner to sell part or all of their property in return for a tax free lump sum. The lump sum offered by the reversion company will always be at a discount to the percentage sold. The reason for this is that the applicants can remain living in the property for the rest of their lives, rent free. Significantly, it could be some time before the home reversion lender receives their money.
No interest element is attached to home reversion schemes. Unlike lifetime mortgages, home reversion offers guarantees as to the percentage of the property that will pass to the beneficiaries at the end of the day. This stems from the initial decision made as to how much of the property’s title is transferred to the lender. For example, if 55% of the property is sold in exchange for a lump sum, then this will still guarantee 45% of the eventual sale proceeds will pass to the beneficiaries. This is a major advantage of home reversion schemes over lifetime mortgages & provides peace of mind.
So why the lethargy surrounding home reversion plans?
Perhaps one of the major stigmas attached is the fact that you will not own your property 100%. The reversion provider will co-own the property with you, thus having a greater say in its maintenance & future planning of the home. They will have the right to inspect the house at regular intervals to ensure it is maintained adequately, thus protecting their security. Any major home improvements will also need their permissions in case you were thinking of extensions or knocking down walls!
Another consideration would be upon moving home or wanting to sell. At this point an equity release calculation would need to be undertaken to establish how much equity you own based on current value upon transfer across to the new abode. Therefore independent valuations would need to be conducted to ascertain current market value. This could prove difficult in today’s market with a lack of sales & depressed housing market.
The one danger of home reversion plans is upon early death. Home reversion would prove expensive should you die or move into care in the earlier years of inception. Effectively, you have given up a large portion of your home based on average life expectancy. If you fail to reach this date, then home reversion could prove a poor decision. On the flip side, if longevity is in your family genes, then home reversion could be a great decision. Oh the virtues of a crystal ball!
Nevertheless, this aspect of the housing doldrums could actually have a positive accent as to why a home reversion plan could be more advantageous than a lifetime mortgage scheme. By taking out a home reversion scheme in anticipation that property values will remain static could prove beneficial. Afterall you are guaranteed that at the end of the day some equity will remain as you have a percentage of the property value guaranteed.
Compare this to lifetime mortgage schemes where the roll-up of interest compounds yearly & will continue escalating until the plan expires. In this situation, should property values remain static, then with a continuously rising mortgage balance & static house prices, will lead to the eventual erosion of the equity. This could be so much so, that NO equity remains at the end of the day with a lifetime mortgage.
So why should you consider a home reversion scheme?
As you can see the home reversion plan offers a sense of assurance which is not possible with many other equity release schemes. With the progress in medical science, the human body is capable of living much longer. Age therefore plays a major role in this equity release plan with a minimum starting age of 65. Indeed, the older one gets before taking out a home reversion scheme the better the terms that will be offered by the lender. The resultant effect of this is the older the homeowner, the more is paid as a capital lump sum.
Some of the negative issues surrounding home reversion schemes have been addressed by the providers – Bridgewater, New Life Mortgages & Hodge Lifetime. Particularly Bridgewater have considered many of these issues & allayed such fears by building in a series of plan options. Similar to drawdown lifetime mortgages, Bridgewater offer a flexible equity release plan which allows you to sell less than 100% of the home & still provide the guarantee of future withdrawals in the future.
Another home reversion plan flexible feature could be a ‘secured escalating release’ option which allows you to release a lump sum of cash now, together with a future income over a number of years. This is achieved with the use of annuities.
Finally, some home reversion plans could also offer protection on early death, so always make the necessary enquiries before entering into a long term financial commitment.
Home reversion redemption
The home reversion company will eventually receive their money by selling the property when the occupier has died or moved into long term care. Additionally, this type of home equity scheme offers the property owner the ability to change properties. This is a requirement of SHIP (Safe Home Income Plan).
Always take the assistance of an independent financial advisor so that they can help estimate the value of your property and help you decide on the scheme best suited to your requirements. Equity release is very beneficial for retired individuals who do not have a steady flow of income or require a capital lump sum for lifestyle improvements. One of the products that could succeed with these bequests could be the home reversion scheme as it offers stability, guarantees for your children and allows you to enjoy a worry free, rent free retirement.
For home reversion advice contact the specialists at Equity Release Supermarket on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk
Tags: Bridgewater, drawdown equity release, equity release, Equity Release Adviser, equity release schemes, Equity Release Supermarket, Hodge Lifetime, home reversion, home reversion plans, home reversion schemes, lifetime mortgages, New Life Mortgages, SHIP
Posted in Home Reversion | No Comments »
Tuesday, October 18th, 2011
An increase in the standard of living & more recently inflation levels has caused a shortfall in pension provision. This is now affecting all those people who are on the verge of, or now in retirement. So for those retirees who are on fixed incomes, how can they allay their fears of personal budget shortfalls?
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Well consider equity release schemes as an effective solution to this problem. If you are looking for some more information, this guide will help you understand the lifetime mortgage schemes available.
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What is an equity release scheme?
Equity release schemes allow you to release equity tied up within your home. These schemes are very popular amongst individuals who are entering, or now into the retirement phase of life. Thus, retirees can therefore overcome any shortfall in their income by utilising the tied up tax free cash within the value of their home. Equity release schemes provide pensioners with a steady flow of income thereby helping them to maintain and improve their quality of life. Additionally, in recognition of the demand for irregular tax free cash, drawdown equity release schemes can now provide flexibility.
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Equity release is used to cover financial products that release home equity. However, they need not require any monthly payments & therefore do not affect retirement budget. It is very important to keep in mind that equity release schemes can only be considered for people who are above 55 years of age. For home reversion schemes this minimum age is increased to age 65 in lieu of the manner these schemes operate.
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Lifetime mortgage plans are becoming increasingly popular amongst retired individuals. They provide a lump sum amount based on a combination of the age of the youngest homeowner & the property value.
The younger this age is, the lower the loan-to-value.
In contrast for those more elderly can release a percentage of the property upto 54%.
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A few other benefits of SHIP (Safe Home Income Plans) equity release schemes are:
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- Improved standard of living
- Portable mortgage to another property
- A fixed rate of interest for life
- No monthly payment or instalments required
- No negative equity guarantee
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Equity release is an ideal option when it comes to securing your future. If you find the process confusing, it is highly important to consult an equity release advisor such as Equity Release Supermarket. With access to market leading deals & special interest rates they can research the whole of the equity release market to find the best equity release deal available.
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If you require advice on which equity release is suitable for you, contact the Equity Release Supermarket team on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk
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Tags: drawdown equity release, equity release, Equity Release Adviser, equity release schemes, Equity Release Supermarket, home reversion schemes, No negative equity guarantee, Roll up lifetime mortgage, SHIP
Posted in Equity Release, Interest Only Lifetime Mortgage | No Comments »
Tuesday, June 14th, 2011
Retired homeowners can now safely make plans for their future with the help of an equity release scheme.
There are a number of equity release schemes available today in the market. Some of these are:
- Interest only mortgages
- Lifetime mortgages
- Home income plans
- Home reversion
Amongst these schemes, the interest only mortgage is very popular. It can either have a fixed or tracker rate of interest which is to be paid at the end of every month. Interest only mortgage schemes have gained popularity in recent times.
This scheme is highly suited to people who are retired and it can help them in their old age. Those retirees who are opposed to the roll-up effect of conventional equity release schemes, can find solice in these interest only lifetime mortgage schemes. The reason being is that the balance will always remain the same & never increase, thus protecting any beneficiaries inheritance.
The interest only mortgage scheme is considered as the safest option by many people. It promises a fixed capital lump sum to spend on anything they wish in retirement.
In other plans such as home reversion, one sells all or part of the property & can thereafter live rent free in the home for the rest of their lives. These schemes do not start until age 65 & now only account for 3% of all equity release plans taken out.
It should be noted that none of the interest only schemes put the retired person at a risk to lose their right to live in their property. However, monthly payments must be maintained in order to not default on their mortgage. Obviously, these interest only mortgages always come with the health warning – Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Should you have any questions on lifetime mortgages, home reversion schemes & interest only mortgages please contact the Equity Release Supermarket advisory team on 0800 678 5159 or alternatively email mark@equityreleasesupermarket.co.uk
Tags: equity release, equity release schemes, Equity Release Supermarket, Halifax Retirement Home Plan, home reversion, home reversion plans, home reversion schemes, interest only mortgage, lifetime mortgage schemes, lifetime mortgages
Posted in Equity Release | No Comments »
Tuesday, April 19th, 2011
Upon researching whether equity release is a suitable option, you may be finding most of the information available in the press or on the internet focuses on the main types of plans available which are Roll-Up Lifetime Mortgages.
There is in fact another type of plan which is less commonly understood and these are called Home Reversion plans.
I think it’s important to consider these plans in more depth. Increasingly home reversions are become more appropriate for those considering taking an equity release plan, particularly if those looking for a simple plan giving a high degree of certainty.
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A home reversion plan involves transferring ownership of all or part of your property to the provider in exchange for a tax free cash lump sum (or you can choose regular payments). Your property is independently valued and from this the provider will work out how much they will pay you for the percentage of the property being sold.
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The amount you’re paid wont be as much as the market value of the property. This is simply because you will be living there rent free for the rest of your life (or until moving out permanently into long term care). As a “rule of thumb” the older you are the more the home reversion provider will pay you for the share sold, that’s because your life expectancy is less. You are still responsible for paying all your bills, insurance and maintaining the property. At the end of the plan the property is sold and if you’ve retained part of it, your share of the proceeds will be paid to your estate.
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When considering a home reversion company, it’s important to choose a provider who is a member of the trade body Safe Home Income Plans. SHIP members offer a guarantee to their customers, the main benefits of this are that you’re allowed to remain in your property for life (provided the property remains your main residence) and you have the right to move plan to another suitable property without any financial penalty. Plus of course you have the safeguard of independent legal advice.
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Home reversions are also regulated by the Financial Services Authority (FSA) which oversees how providers and advisers must deal with you. And finally, because home reversions involve the sale of property a third level of extra consumer protection is given by UK property law, which governs the relationship with the provider and their obligations towards you.
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So what type of people are home reversion schemes most suitable for?
Well it really boils down to your thoughts and concerns. As a guide a reversion might be more appropriate for someone who falls into some or all of the following categories:
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- Customers who want to specifically avoid debt – a home reversion plan is not a mortgage & cannot therefore be repossessed
- Those concerned house prices won’t keep going up – the risk of falling house prices is passed to the provider
- People in good heath and confident that they may live for many more years to come (for example there may be a history of longevity in the family) – generally the longer you live the better value a reversion becomes
- Anyone wanting to the peace of mind of knowing that if they need to in the future, they can access the maximum cash from their remaining equity – some providers will guarantee to always release further funds until 100% of the property is sold
- Clients wanting to guarantee an inheritance for their estate – for example if only 25% of the property is sold, the estate will inherit 75% of its value after costs
- Those wanting to release more cash from their property than they can by using a lifetime mortgage
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Naturally home reversion plans are not for everyone. Generally you will only be eligible to take a reversion plan if you are 65 or older. Ideally, to get the better rates you would need to be over age 70.
As reversions are a long term commitment they should not be considered if you intend to repay the money released at some stage in the future (for example if you’re expecting an inheritance).
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If you are in poor health or expect to have below average life expectancy then you may not get full value from a reversion either. However, we do have access to products now that do offer an impaired life (poor health) facility & therefore can provide an extra lump sum for this reason.
For those unfamiliar with how a reversion works there is understandably a little concern about giving up all or part ownership of your property.
The reality is that the terms and conditions of a reversion (ie the “small print”) are similar to that of equity release and your right to privacy and freedom to live in your own home are not affected.
Usually with a home reversion you are granted a lease for life to live in the property for as long as you wish to. And this important legal arrangement is recorded by HM Land Registry much the same as a leasehold flat or house is. So although you may have sold all or part of the property to the provider it still very much remains your home.
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The decision to release equity from your home using a home reversion plan or a lifetime mortgage is an important one and you will need specialist advice from a Financial Adviser in order to do so. They can talk to you about whether equity release is right for you and if it is what sort of product best suits your particular needs.
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To obtain further information on Home Reversion schemes, please contact an Equity Release Supermarket adviser on 0800 783 9652 or email mark@equityreleasesupermarket.co.uk
Tags: equity release, Equity Release Adviser, FSA, home reversion, home reversion plans, home reversion schemes, impaired life, inheritance protection, lifetime lease, lifetime mortgages, lifetime tenancy, SHIP
Posted in Advice, Equity Release | No Comments »
Friday, March 4th, 2011
Equity release is a type of mortgage which is secured on your property and helps you to access money attached to it. The value of your property minus any secured loans placed upon it is termed as equity. You are able to withdraw this amount to assist you financially in later years.
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What is equity release all about?
A clichéd reason given for releasing equity is mainly ‘debt consolidation’. During 2011, debt consolidation is proving to be the most popular reason for releasing equity from one’s property.
Debt consolidation involves settling mortgages, loans, credit cards & any other unsecured finance which the individual is finding difficult to maintain. Once these debts are repaid, your monthly expenditure is reduced thus giving you extra income to enjoy. Other reasons for releasing equity could be to buy a new car, holidays or generally making your lifestyle more satisfactory during retirement.
The equity release plans do not have a fixed term therefore they run for the rest of your own or your partner’s life. If there is any money left, it is passed onto your nominees as suggested in your will. This scheme is only meant for people who have retired and are over 55 years of age.
There are two types of equity release scheme. The lifetime mortgage scheme is recommended for people who are retired. A loan is given to the borrowers on their house. Interest is then added annually to the loan, which is then repaid by selling the property when the borrower dies or when they move out into long term care.
The second option is a home reversion scheme & refers to selling the whole or part of your property to the reversion provider. This means that it the property itself is actually shared or even fully belongs to someone else. The borrowers can continue to live in their house for as long as they wish & not have to worry about any rental payments.
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To ascertain which equity release scheme is suitable for yourself, contact the Equity Release Supermarket team on 0800 783 9652 or visit our market leading website at EquityReleaseSupermarket.co.uk
Tags: equity release, equity release schemes, home reversion, home reversion schemes
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Wednesday, December 22nd, 2010
Home reversion equity release schemes allow you to sell a part of or your entire property to a lender. In return, the home reversion company will provide you with a monthly or lump sum cash amount or a combination of both.
Although the interest is not paid on the loan you take, the home reversion company will take a percentage of the value of your property when it is eventually sold. This percentage will often depend on numerous factors including – your age, the cost of your property and its condition.
The older you are, the more money you will be able to receive. Additionally, should you have a history of poor health then certain home reversion providers can potentially offer you a greater lump sum, or alternatively a lower percentage sale of your property.
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How do home reversion equity release schemes work?
With home reversion equity release schemes, you sell part of or the entire property to the lender and become a tenant with a lifetime tenacy guarantee. You will still be responsible for your property, its maintenance and bills. Although you become a tenant, you get the rights to reside in your property with your partner under a lifetime lease. Unlike normal residential tenants, there is no rent to pay for the rest of your life.
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The difference between lifetime mortgages and home reversion
Under a lifetime mortgage scheme you retain the complete ownership of your property. On the other hand, with a home reversion scheme you can sell anything up to 100% of your property to the home reversion company.
A major benefit of home reversion schemes is that you can guarantee the percentage of the final sale value of the property at the end of the day. A lifetime mortgage has no guarantee as there is no knowledge of how long the plan will roll-up for, which at the end of the day could result in NO inheritance for the children.
There are also some interest only lifetime mortgage schemes such as the Halifax Retirement Home Plan that enable you to repay the interest but not the capital to the building society or bank. This greatly helps you to calculate how much inheritance will be left as long as the monthly payments are an affordable option.
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If you wish to discuss whether a lifetime mortgage or home reversion scheme is right for you contact the Equity Release Supermarket team on 0800 678 5159.
Tags: Halifax Retirement Home Plan, home reversion, home reversion schemes, lifetime mortgages, poor health equity release
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Monday, December 20th, 2010
Should you have already purchased your annuity from your pension scheme, then unless it is indexed linked by inflation you may now be feeling that has lost some of its purchasing power over the years. With inflationary fears currently still persisting, even with the recent downturn in the UK economy, then people are looking at extra ways to enhance their retirement income & lifestyle.
Obviously, once a pension has been purchased then it is fixed for life, so alternative sources of boosting one’s retirement income need to be sourced.
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So how can equity release assist?
Equity release allows you to enjoy the monetary benefits of your assets without having to sell them. This is one of the ways to use the equity locked in your property. Equity release schemes are available only for retired individuals over the age of 55.
There are two types of equity release schemes: Lifetime mortgages and home reversion schemes. Consider the benefits of these two and choose one that suits your requirements. It is prudent to opt for independent financial advice when dealing with equity release schemes.
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Lifetime mortgage schemes: These schemes are designed for property owners. They help in gaining money by mortgaging the property. A major benefit of opting for this scheme is that you still remain the sole owner of your property. Individuals over 55 years of age are eligible for lifetime mortgage schemes.
One type of lifetime mortgage scheme called drawdown equity release could be a solution here. The lender will calculate an overall maximum that can be released & from this the applicant can withdraw this reserve facility in small amounts at times to suit one’s requirements. This could be monthly, half yearly or even annually, but the choice is yours. Therefore, by opting for a drawdown scheme could boost your retirement finances with flexibility.
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Reversion schemes: Contrary to lifetime mortgage schemes, home reversion schemes require you to sell a part or all of your property to enjoy monetary benefits. A lump sum from one of these schemes can be used to purchase an annuity which could therefore supplement any existing pension scheme.
Dependent on the lump sum raised, age & health & options built into the annuity would determine the regular income to be paid by the annuity provider. Always shop around or seek the advice of an independent financial adviser to ensure the maximum possible income is achieved.
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Eligibility
You should be the sole owner of your property prior to mortgaging it. The aforementioned schemes have different age requirements. While lifetime mortgage schemes require an individual to be 55 years of age, home reversion schemes need the individual to be 65 years of age to qualify. Your property will be surveyed and you can qualify for these schemes only if it is worth £60,000 or more.
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Equity Release Supermarket have independent financial advisers that can provide advice on both equity release & how to maximise your retirement income with annuities & pensions.
Contact us on freephone 0800 678 5159 if you wish to discuss whether any of these products can help your retirement financially.
e: mark@equityreleasesupermarket.co.uk
w: http://www.equityreleasesupermarket.co.uk
Tags: drawdown, equity release, equity release schemes, home reversion, home reversion schemes, lifetime mortgage schemes, lifetime mortgages, pension annuity, purchased life annuity
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Thursday, December 16th, 2010
Before entering into for equity release, you need to be well versed with this financial product. Below are answers to some common questions that might make your task easier such as what is equity release.
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What is equity release?
Equity release schemes help retired individuals to raise money from their property. Firstly, the term ‘equity’ describes the net value of your property. This is calculated by taking the current sale value of the property & deducting any mortgage or secured loans upon it.
The money raised is this equity tied up in the property. This money can either be withdrawn as a lump sum or in monthly instalments, the popular of which is primarily the former. A main feature of these equity release schemes is that you do not have to move out of your house and allows you to live your life in peace and financial comfort.
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What are the uses of equity release plans?
The tax free lump sum released is yours to spend as you wish. The equity release companies do not place any restrictions on how the money is spent. You can make use of the released cash to supplement your retirement income and clear debts including mortgages, loans, credit cards, hire purchase & catalogues.
Apart from this, you could also use the money to go on holidays, redesign your home, purchase new car or increasingly an popular reason which is to help children invest in bricks & mortar or get on the property ladder for the first time.
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What are the types of schemes available?
Equity release schemes broadly fall into two categories – lifetime mortgages and home reversion plans.
With lifetime mortgages, you get a secured loan on the property. You do not have to make any monthly interest payments. Instead, the interest gets rolled up and is paid off when the property is sold. This would be on death of the last survivor or moving into long term care. Therefore, you can continue to live in your home for the rest of your life or until the time you move into a retirement or care home. The main difference between the roll-up lifetime mortgage scheme & the home reversion is that with the former, the property remains 100% in the name of the property owner.
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With home reversion plans, you can sell a part or all of your property to the lender in return for a lump sum. The home reversion providers will therefore take partial ownership of your property to the extent of the percentage sold.
A lifetime tenancy is created so you can live rent free in the property for the remainder of your life. This are great equity release solutions for those who wish to guarantee an inheritance for their children & beneficiaries.
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Why is life expectancy important?
The type of scheme chosen by you will depend on how long you are likely to stay in your house. The older you are, the more tax free cash you can raise.
With a lifetime mortgage scheme, the longer you live the greater the final balance will be. This is due to the roll-up & compounding effect of the interest on a year on year basis. Therefore, there you cannot predict how much equity will be left at the end of the day as you do not know long the plan will roll-up for.
On the 0 hand the advantage of home reversion schemes are that you can guarantee an inheritance for your beneficiaries. The reason for this is due to the fact that if a percentage of the property is sold, then the remaining percentage is yours to keep. Consequently, the estate will retain this percentage of the final sale value of the property & can guarantee an inheritance to pass down.
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Not sure which scheme is best for your circumstances? Why not call the Equity Release Supermarket team on freephone 0800 678 5159 or email mark@equityreleasesupermarket.
We look forward to hearing from you.
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Author
Mark Gregory CeMap CeRER
Tags: equity release, equity release companies, equity release schemes, home reversion, home reversion schemes, lifetime mortgages
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Sunday, December 12th, 2010
It is only normal for people to want an adequate income to support themselves in financially uncertain times, such as the present.
Unfortunately, not everyone can get access to this income easily, especially homeowners who have retired. Having been on employed income for most of one’s life & then seeing a drop in income can be daunting. The good news is that the FSA has permitted ways for homeowners who have retired to gain additional income or capital lump sums through the equity in their homes.
The result of this is equity release, where homeowners over 55 years of age can gain income from the value of their homes.
There are different equity release schemes from which homeowners can choose depending on their preferences. Here are some of the schemes offered to homeowners through equity release.
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Lifetime mortgage – This equity release scheme involves arranging monthly income or getting a lump sum from the equity of your home. Once the equity has been released. there are NO monthly repayments to make with these type of plans. The interest is instead rolled-up & added to the balance on a yearly basis, escalating to the extend of roughly doubling the balance every 10-11 years.
Home equity release therefore has the effect of reducing your beneficiaries inheritance & as a consequence it is always advisable to involve your children in the equity release process & decision making.
At the end of the term of the mortgage term, which will once the second person has died or gone into long term care, the lender can use their calculator to ascertain the redemption figure. The loan is then repaid once the property has been sold which most equity release UK companies will allow 6-12 months for this to happen. Therefore, even in today’s depressed property market there should be ample time for the property to be sold at the best price possible.
Depending on the equity release interest rate & how much was originally borrowed will determine the final balance to be repaid.
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Home revision – with this scheme, the reversion company will actually buy a share of a property. This can be anywhere upto 100% of the property value. In the meantime, a lifetime tenancy agreement is made which allows you to live rent free for the rest of your life. (This must NOT be confused with non-regulated sale & rent-back schemes which do not offer this feature). You make an agreement with the home reversion provider to keep the property in good condition for the duration of the term.
At the end of the day, (death or long term care) again the property will be sold. The amount the reversion company will require will be the percentage that was sold to them. Therefore, if 75% of the property value was sold to the reversion company, then 25% of the sale value will be retained by the homeowner. This has the major advantage over roll-up lifetime mortgage schemes in that your beneficiaries will know exactly what amount of the property value they are to receive.
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Shared appreciation mortgage – There are some lifetime mortgage schemes that allowed homeowners to share the increase in home value. This can make a huge difference to the final outcome in a time of quickly increasing house prices. These plans are no longer sold & were withdrawn in the 90′s. Such schemes do still exist are subject to review.
The worked by instead of charging interest for the loan, the bank could usually take anywhere up to 75% of any house price rises over the life of the mortgage. However, house prices escalated significantly over the next decade & meant that people who took out these plans ended up owing the banks hundreds of thousands of pounds.
Despite house prices falling over the past 18 months, the average house price has still risen by over 100% from the late 1990′s, to date. This has left many elderly borrowers unfortunately marooned in their homes. The reason for this is that any reason for them selling the property, such as a move into residential care, would trigger a massive payout to the shared appreciation mortgage lender leaving people with no funds to move forward. Companies such as Barclays & Bank of Scotland were the main protagonists in this equity release arena.
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Before entering into any equity release scheme, always seek independent financial advice.
Call freephone 0800 783 9652 to speak to one of the Equity Release Supermarket team.
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Tags: equity release, equity release schemes, home reversion, home reversion plans, home reversion schemes, income plans, Roll up lifetime mortgage, shared apprecaition mortgage
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Wednesday, December 8th, 2010
Today, equity release schemes are preferred by many people because they help unlock money against the value of their homes. If you are 55 years of age or older and facing financial constraints then you should consider equity release schemes. They are specifically designed for older people who own their own home and seek to live a better life.
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How do equity release schemes work?
With the help of these schemes, you can obtain 15% to 50% of the value of your property. To qualify for equity release, you must also have no or very little outstanding debts. If you have any secured debts then they must be fully repaid, either before or actually on completion. In exchange for a value of your property, the lenders will pay you a lump sum amount of money or a monthly payment.
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Two different types of equity release scheme
To fulfill different needs, two different types of equity release schemes have been introduced. These include lifetime mortgages and home reversion plans.
If you choose a lifetime mortgage, you can receive a lump sum amount of cash against your property. The best thing about this scheme is that the repayment is made when the homeowner dies or moves to a care home. Today, different types of lifetime mortgages have been introduced by different financial institutions.
Home reversion plans allow you to sell a part or all of your property in exchange for a cash payment. You will receive a lifetime tenancy agreement & have no rent to pay for the rest of your life.
All equity release schemes we advise on are regulated by the FSA (Financial Services Authority) & are members of SHIP (Safe Home Income Plans).
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To establish which of the two lifetime mortgage schemes are suitable for your requirements, contact the Equity Release Supermarket team on 0800 783 9652.
Tags: equity release, equity release schemes, home reversion, home reversion schemes, lifetime mortgage schemes, lifetime mortgages
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