If you are 55 plus and own your own home that is your main residence, then you are eligible to choose from any of the current equity release schemes.
Today, many retired people are opting for equity release schemes because they offer a lump sum of money against the value of the property. Home reversion plan and lifetime mortgages are two different types of equity release schemes.
By opting for home reversion plans, you can sell all or just a part of your property in exchange for money. This tax-free cash will help you to live the rest of your life in financial security. There is also a lifetime mortgage scheme which allows homeowners to sell their whole property for money.
Lifetime mortgages are further divided into various types such as:
- Roll-up plan – Under this scheme, you can borrow an amount of money from the mortgage lender against your home. You do not have to make any payments to the lender in order to repay the equity release mortgage. Instead the interest charged is added to your last years balance & compounded annually thereafter. Therefore the balance will increase year by year until the equity release planholder either moves into care or dies. At this point, the property is usually sold & the equity release company is repaid.
- Home income plan – By opting for this scheme, you will receive a regular monthly income against your home. In this scenario, a percentage of the value of the property is sold in exchange for a tax free lump sum. These funds are used to purchase an annuity which is how the scheme then provides the monthly income. The lender or financial institution will be paid by selling the home after you die.
- Interest-only mortgage – Unlike the roll-up plan, this type of equity release scheme allows you to pay off the interest charged monthly. Therefore the balance of the mortgage will remain exactly the same for the duration of the plan term. As a consequence the beneficiaries will know the exact amount that will be deducted from their inheritance. The actual loan is again repaid by selling the property. For interest only lifetime mortgage deals see our website.
Out of the above mentioned lifetime mortgage schemes; you can choose the one which suits your financial needs by contacting Equity Release Supermarket on 0800 678 5159 or email [email protected].