An increase in the standard of living has caused a shortfall in pension provision. This has affected the individuals who are on the verge of their retirement. An equity release scheme can be a solution for this problem. The following are some of the important aspects of equity release schemes:
What is an equity release scheme?
Equity release schemes allow you to release the equity in your home. Such schemes are already immensely popular among the individuals in their retirement. They can thus cover the shortfall in their income by getting more value for their homes.
Several pensioners as well as their children consider equity release as a good option. Such schemes provide them with a steady flow of cash in their retirement days. They can thus maintain as well as improve their quality of life in their retirement.
Equity release schemes
Equity release is basically a term used to cover different financial products that release home equity. However, the individuals do not need to meet any monthly payment. Keep in mind that equity release schemes can only be purchased by individuals above the age of 55 years.
Equity release products are divided into two broad categories as follows:
- Lifetime mortgage schemes
- Home reversion plans
Out of these two options, a lifetime mortgage is popular among most retired individuals. Sometimes, the lifetime mortgage providers provide a lump sum amount which is decided on the basis of the individual’s age and value of the property. This amount can also be given as an ongoing monthly amount.
The following are some of the other benefits of opting for equity release
- Fixed rate of interest for life and no monthly payment
- Mortgage can be transferred to a new property (subject to property criteria & valuation)
- Plans can be repaid at anytime (subject to potential early repayment charges)
Thus, equity release schemes hold the key to an improved lifestyle post-retirement.
Hopefully equity release solutions exist for you. Please call freephone 0800 678 5159 to chat to one of our friendly equity release advisers.