Inadequate pension amounts and rising living costs have made many people look for alternatives to their retirement schemes in order to live comfortably. Due to this, an increasing number of pensioners are considering equity release to improve their finances during their retirement years. Equity release consists of releasing part of the value of a home to gain financial benefit. If you are considering this option, here are some things you should know.
Choice of payment - The most common equity release product available is a Lifetime Mortgage. These provide homeowners with a lump-sum amount of money depending on the value of the property and the age of homeowner. Apart from this method, homeowners can also choose from a minimum amount at the outset which is followed by a drawdown facility, a single lump sum and a lump sum along with an ongoing monthly amount.
Interest rates – Homeowners who opt for equity release should know that all lifetime mortgages include interest to the borrowed amount. This is for life and at a fixed rate of interest. The amount accumulates eventually, until the outstanding balance can be repaid. This is done either when the last surviving applicant passes away, moves into a long term care facility or when the house is sold.
As equity release is an important decision, it is best to have some legal help when opting for it. This will ensure you get the most out of the process.
Equity Release Supermarket can advise on suitable solicitors for the processing of your application. Goldsmith Williams Solicitors have a fixed rate agreement with ourselves at £295 + VAT & disbursements.