Equity Release Schemes: Some basic information

by Jody North on December 6, 2011

Equity release is a way of unlocking value of a house, without having to move house. It’s used mostly by elderly home owners whom either have paid back their mortgage loan completely, or have a little bit remaining to repay. All equity release schemes are intended to be long-term arrangements and are therefore not to be got into casually. Once you have opted in for them it may be hard, expensive or even just unfeasible to get out of if your circumstances change.

A few of the options will demand that you surrender ownership of your house possibly completely or in part; others that a mortgage is put on your home. After a period of saving to repay the mortgage this may be a hard thing to do. In the event you choose to take this path, it’ll be important for the peace of mind to know fully what this can mean with regards to your rights and protection of tenure – to put it differently, your right to remain in your home for your lifetime.

These will be put down in your small print of the company’s offer to you. If you are not happy to accept them, equity release might not be for you. If you opt to go ahead and make use of the value of your home to produce additional income or capital, then it is crucial to remember this will inevitably have an impact on any monetary gift you may wish to leave to your family.

The majority of the schemes for equity release work either by selling part of your property, or by taking out a home loan in which the interest is rolled up until death. Keep in mind that either of these methods can result in a loss of assets to pass on following your death. It is for this reason that you might consider speaking about the options with the family – it may be that they can help in some way.

Equity release is just not suited to everyone and you must always consult an independent legal financial expert prior to taking out a plan. Getting the right advice from experts in this area is essential. They will explain the lawful elements included and assist you to see the terms and conditions of any agreement.

Because these are long-term plans, you have to be particularly careful to take into account what may happen in the future. Your needs may change as you get older and it’s important to have considered how any plan of action taken right now may impact your future options.

Learn more about equity release schemes. Stop by this website where you can find out all about lifetime morgages and what they can do for you.

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