Equity Release: Some basic information

by Jody North on December 7, 2011

Equity release is known as a way of unlocking the value of a house, and not having to move house. It is used generally by older homeowners who either have paid off their mortgage altogether, or have a small amount left to repay. All equity release schemes are intended to be long-term plans and so are therefore not to be got into lightly. After you have opted in for them it can be difficult, pricey or even just impossible to get out of if your circumstances change.

A number of the options will require that you give up possession of your home either totally or in part; others that a mortgage is put on the house. After a period of saving to repay the mortgage loan this is usually a difficult thing to do. Should you opt to take this path, it will be essential for the peace of mind to comprehend completely what this will mean in terms of your rights and safety of tenure – put simply, your right to stay in your house for your lifetime.

These will be put down in your conditions and terms of the loan company’s offer to you. If you aren’t pleased to accept them, equity release might not be for you. If you want to go ahead and take advantage of the value of your property to supply extra revenue or capital, then it is important to remember this will undoubtedly have an effect upon any inheritance you may want to leave to your loved ones.

The majority of the schemes for equity release work either by marketing a portion of your property, or by taking out a mortgage in which the interest rates are rolled up until dying. Understand that both of these methods will lead to a loss of assets to pass on after your death. It is for this reason you may possibly consider speaking about the options with the family – it could be that they can aid in some way.

Equity release isn’t suited to everyone and you should consult an independent legal financial advisor before you take out a plan. Obtaining the right advice from experts in this field is important. They will clarify the lawful factors involved and assist you to understand the terms and conditions of any agreement.

As these are long-term arrangements, you should be particularly cautious to take into consideration what can happen in the future. Your position may alter as you get older and it’s important to have considered how any approach taken now might affect your future options.

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

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