Equity Release is the term used to describe a financial solution that is available in the United Kingdom for those who are above 55 years of age. Read here www.londonequityrelease.net for more.
What is Equity Release?
Equity release refers to a range of products that let you access the equity or cash tied up in your home if you are above the age of 55. You can take the cash you release as a (1) singular amount or, in (2) several smaller amounts or as a mixture of both.
Two Different Options of Equity Release
With Equity Release Schemes; (1) Lifetime Mortgages and (2) Home Reversion Plans being the actual options (products) that are available.
Lifetime Mortgage – You take out a mortgage secured on your property provided it is your main residence, while retaining ownership.
- You can choose to reserve some of the value of your property as a legacy for your family.
- You are allowed to make repayments or let the interest move up.
- The loan amount and accrued interest (if any) is paid back (1) when you die or (2) when you move into long-term care.
Home Reversion – You sell part or most of your home to a home reversion provider in return for a regular or lump sum payment. You have the privilege to keep living in the property until you die (that too rent free) but you have to agree to preserve and insure it.
- You can ring-fence a part of your property for later use, perhaps for legacy.
- The part of the property you retain will at all the times remain the same irrespective of the change in property values, unless you choose to take additionally cash releases.
- At the end of the agreement your property is sold, and the deal continues are shared by the rest of the extents of proprietorship.