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Two Different Types Of Lifetime Mortgages

By Mark Gregory on October 13th, 2010

If you want to improve your lifestyle or repay outstanding debts and do not have enough cash then consider the potential of an equity release scheme. Homeowners who are over 55 and have little or no mortgage can release money against the value of their home. Due to different needs, different equity release schemes have been introduced.

 

Lifetime mortgages and home reversion plans are two popular types of equity release schemes.

Lifetime mortgages are further divided into two subtypes:

 

Roll-up lifetime mortgages – This equity release scheme is preferred by many people because they do not have to pay any interest. Instead the interest is added to the original balance & compounded year-on-year for the rest of one’s life.

 

Interest-only lifetime mortgages – If you do not want your debt to build up then an interest-only lifetime mortgage can be the perfect option for you. Unlike other equity release schemes, this scheme allows you to pay off the monthly interest to the lender. By opting for the interest-only option, you can preserve more money for the future. The balance of the interest only mortgage scheme will therefore remain level for the rest of the term of the mortgage. Such schemes available include the exclusive deal Equity Release Supermarket have available with the Halifax.

 

The Halifax Retirement Home Plan is available to those having already retired with a good disposable income with which they can service the monthly payments. The Halifax Retirement Home Plan is not available via the Halifax branch network as only lifetime mortgage advisers with the appropriate licence can advise on this product.

 

Whether you choose a roll-up or an interest-only mortgage you can release the equity tied up in your property to provide the tax free lump sum you require.

You can use the tax-free money to spend as you wish including buying a new car, a second home or to go on a luxury cruise; the list is endless.

If you have decided to opt for equity release schemes then it is recommended that you receive advice from an equity release adviser who will guide you to the best equity release plan & guide you through the equity release process.

 

To find a local Equity Release Supermarket financial adviser near to you click here.

 

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