The pending bills may be a reason behind your stressful life, especially after your retirement. After retirement, there is no regular source of income but the expenses remain the same. The bills against the daily expenses don’t stop piling up on account of your retirement and if you don’t pay your bills on time then the situation may worsen in the future. The source of income may have ceased but not the expenses. Thus you have to find a solution to your problem such as equity release loan choices.
Worsening the Situation
The situation worsens when the amount of your pending bills starts growing due to the interest levied by your creditors. Interest from the creditors on your pending bills may grow like a big monster carrying a high potential of claiming your complete estate one day. It is better to pay your pending bills before the situation slips out of your hand.
What Equity Release Can Do
An equity release loan could be your best choice because the cash released from the equity held in your home can be spent in any way as you desire. It can help you pay or completely pay off all the debt built up on account of your pending bills. It lets you release the wealth lying idle in your home. Depending on the amount of your pending bills, you can even take an equity loan either partially or fully on your home.
Credit card debts, car loans, and student loans for your grandchildren are only some of the different types of debts that may be pending on you. We all know that all these types of loans come at a very high rate of interest and without an additional source of income you may not be able to pay off these debts completely. You can continue paying interest regularly but that won’t improve the situation in any way because the capital remains the same even when you keep on paying the interest regularly.
The No Negative Equity Guarantee
Equity release loans also promise a no-negative equity guarantee so that you don’t have to worry about any liability over the value of your home. Irrespective of the market fluctuations, change in interest rates or any other unforeseen event, you can be assured that even in the worst case scenario, it is only your home that can go to lenders and that too will only be after your death.
Benefits of Equity Products
Already you know the benefits in terms of paying bills and ensuring that your home remains in your hands until death or until you decide to sell. There are other benefits such as paying out inheritance to your children and beneficiaries over the years so that they are not faced with a large inheritance tax that would cause the sale of the home anyway.
Working with Equity Release
When you decide to take out an equity release loan there are certain parameters that you must meet. First you need to be at least 55 years of age. Depending on the type of loan you may have to be less than 75 years of age. This is particularly true of the interest only lifetime mortgage that has started to require payoff within 10 years and an age cut off of 75. Your age, the value of your home and other personal information will be required to determine the amount of equity that can be released in a loan.
Types of Lifetime Mortgages for Pensioners
There are four types of lifetime mortgages for you to use: drawdown, roll-up, EnhancedLifetimeMortgage, and interest only. The interest only lifetime mortgage loan allows you to make a payment on the mortgage for as long as you have it. This keeps any interest from adding on to your mortgage principle. It is the only option that will not have compounding interest.
Drawdown lifetime mortgages allow you to draw on an account of readily available funds. You will need to take a smaller lump sum in the beginning and then you can access the funds as you need them. Interest only compounds on to what you use rather than what is available.
Rollover is specifically named because the interest rolls over into the mortgage payment until the very end. Lastly for equity release loan options you have the illness lifetime mortgage which is simply a quicker turn out of funds for you to use based on a chronic illness that could reduce your life expectancy. This type of loan helps those who really need funds, but do not have long to live pay for their debts and make life more comfortable.
Our clients are satisfied with their new lives!
National Equity Release Pension Conference, Bath Street, Bakewell, Derbyshire, DE45 1BX.
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