Equity Release Schemes: Things to consider

by Jo Smith on November 27, 2011

Equity release is a way of unlocking value of a property, without needing to move home. It’s used primarily by elderly home owners who either have paid off their mortgage loan entirely, or have a little bit remaining to pay. All equity release schemes are intended to be long-term agreements and so are therefore not to be applied for without thought. Once you have opted in for them it could be challenging, pricey or even impossible to get out of if your circumstances change.

A few of the options will require that you give up possession of your home either completely or in part; others, that a mortgage loan is put on your property. After a period of saving to repay the home loan this is usually a hard move to make. If you do opt to take this route, it’ll be very important for your reassurance to know totally what this can imply in terms of your legal rights and security of tenure – quite simply, your right to continue in your property for your lifetime.

These will likely be set out in your conditions and terms of the company’s offer to you. If you’re not happy to accept them, equity release may not be for you. If you opt to proceed to utilize the price of your property to provide extra revenue or capital, then it’s important to remember this can unavoidably have an impact upon any bequest you might wish to give to your loved ones.

The majority of the techniques for equity release work either by selling a portion of your property, or by taking out a mortgage where the interest rates are rolled up until death. Do not forget that either of those approaches will lead to a loss of possessions to pass on following your death. It’s for this reason you may possibly think about discussing the options with your family – it might be they can help in some way.

Equity release isn’t suited to everyone and you should always talk to an independent legal financial consultant before taking out a policy. Getting the correct advice from experts in this field is crucial. They’ll explain the legal factors needed and enable you to see the conditions and terms of any contract.

Since these are long-term agreements, you need to be especially careful to take into consideration what could happen in the foreseeable future. Your circumstances may change as you become older and it is crucial that you have considered how any course of action taken now may affect your future choices.

Looking to find the best deal on equity release schemes, then visit www.equityreleaseadviceline.co.uk/ to find the best advice on lifetime morgages for you.

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