More and more people have started enquiring about equity release schemes. The growing popularity of equity release schemes is no surprise since the rate of returns on savings, therefore income produced for pensioners, has become considerably low.
People save throughout their lives to spend their old age in comfort. People rely on their savings for their future. With the low returns, it has become difficult for retired people to survive on just their savings.
Though retired individuals may have money locked in their property, this cannot alwys be unlocked using the conventional mortgage route. The traditional mortgage route requires the potential borrower to confirm affordability and have a consistent programme for repayments to the mortgage. This can be very difficult, as the majority of people’s income could solely be the state pension. On its own this would not justify supporting a mortgage & therfore it is only people with additional occupational or private pensions that can support a mortgage in retirement.
Equity release is a windfall
Equity release has proven to be a benefit to all those individuals aged above 55 to generate cash from their property, without having to sell it. Though this may seem attractive, subscribing for an equity release scheme should not be done without proper research.
Typically, there are two types of equity release scheme; home reversion schemes and lifetime mortgages.
With a lifetime mortgage, the borrower is not required to pay monthly instalments. Instead, the interest charged gets rolled up on the sum taken on the loan and can be repaid when the property is sold off after the owner’s death.
Home Reversion schemes
With a home reversion scheme, the owner is required to sell off part or all of their property to the ‘reversion’ company to get cash in return.
Equity release is a beneficial way of getting attractive cash benefits using your assets, but thorough research should be done to understand the potential benefits and limitations.
Please contact the Equity Release Supermarket team on 0800 678 5159 to get independent equity release advice from one of the leading equity release advisory service companies in the market.