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Equity Release Schemes – Enjoy Your Life After Retirement

By Mark Gregory on the 25th December 2010

Do you need to unlock money from your property?

If yes, then equity release schemes could be the ideal solution for you. The best thing about these schemes is that they allow you to stay in your home even afterward you have released the equity.

Unlike other loans, the money which you receive through equity release is tax-free in nature & means that you can spend the cash in whichever way you want. Another difference between loans & equity release schemes are that loans have monthly repayments to make. With an equity release scheme you have NO monthly payments whatsoever.

Finally, a loan will always have a fixed term over which the loan must be repaid. However, equity release schemes has no repayment period from the outset as it only needs repayment once the property is sold.

How to qualify for equity release schemes?

Today, there are various financial institutions which provide equity release schemes. If you want to opt for equity release then you have to meet the criteria. First of all, you have to be over 55 with no maximum age and you must own a home which is worth £60,000 or more. The property should be mortgage free, or with a mortgage balance that can be easily repaid with the release of equity from the property. Therefore, the balance should be below the borrowing threshold that the equity release schemes provide.

Types of equity release schemes to fulfill many financial requirements, two different kinds of equity release schemes have been introduced onto the market. This includes lifetime mortgages and home reversion plans. Nowadays, many homeowners prefer lifetime mortgages because the repayment is done after the death of the applicants. Home reversion plans allow you to sell all or a part of your property, but have the advantage of guaranteeing an inheritance for your beneficiaries.

How equity release schemes are regulated

The Financial Services Authority (FSA) takes care of various regulations related to equity release companies & schemes. Additionally, the equity release adviser should also be regulated by the FSA & can be checked on the FSA register which is on the FSA website. Moreover, within the equity release industry a trade body has been formed named SHIP (Safe Home Income Plan) & was formed in 1991. This SHIP organisation regulates all the equity release schemes offered by different financial institutions in the UK & liaises with the government on regulation changes & amendments to the equity release marketplace.

If you have any equity release questions relating to whether equity release can benefit you then please call our friendly adviser team on 0800 678 5159.

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Tags: Financial Services Authority, FSA Register, Safe Home Income Plan, FSA, SHIP, Lifetime Mortgages, Equity Release, Home Reversion Plans, Equity Release Schemes, Home Reversion, Equity Release Adviser

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