Many people are not aware that it is possible to get money from their homes without having to rent or sell them. This can be done by a procedure known as ‘equity release’ which helps people to get tax free funds without selling their home. After a person buys a property, the value of the home gradually increases over time, albeit can be cyclical and currently the property market is at the bottom of this cycle. This is why examining key retirement solutions is imperative to ensuring you have the right product for you.
When property prices do pick up this additional increase in value is known as 'equity' and a person can borrow money based on this added value.
The first and most important step is to seek advice from companies that specialize in this kind of arrangement by offering a range of key retirement solutions. One of the common reasons why people seek an equity release is being unable to cater for household maintenance costs. An equity release mortgage gives homeowners access to cash to keep their houses in good condition and thereby maintain their re-saleability.
Since economic slowdowns are unavoidable, property owners can use their houses to get financial help in order to get them through the tough economic times. An equity release mortgage benefits people who are rich in terms of property equity but actually cash poor when it comes to bank and cash savings. When a homeowner takes up an equity release mortgage they get access to cash which can then be used to carry out many important tasks.
The only possible way for a person to get money from their house was to sell it and rent another one or buy a house of lesser value. This was quite cumbersome and usually didn’t help people to get money in times of emergencies. Also, people may not wish to leave their home as it may carry fond memories for themselves and their children.
Equity release enables people quick access to cash during emergencies. There are many firms specializing in equity release such as www.EquityReleaseCompanies.com and Compare Equity Release, and most times a person can get free financial advice about borrowing money on their house’s equity.
Another great benefit of equity release is that it can provide a constant source of income to a person for the rest of their life. Depending on the agreement, a person does not have to pay any money until the last member mentioned in the agreement passes away or moves into long term care. The only other time when a person forfeits the benefit of an equity release agreement is when they decide to permanently move away from the house. In this case the house has to be sold in order to repay the borrowed amount and this is when the equity release company receives their money back with interest.
Key Retirement Help Broken into Options
Key retirement solutions offer you a range of products. There is a product for almost every person looking to take equity out of their homes during retirement. You will need to assess your current situation to determine which product is going to best fit you.
For example if you want to retain ownership of your home, then you know home reversion is not the scheme for you. If you fear having repayments after your death or when you move into a retirement community, then home reversion would be the better solution.
Home reversion allows the sale of part or your entire home, but you have a lifetime tenancy agreement to remain until you decide to move out. The money is free and clear, without any interest accrual because you owned the home, but sold a bit of it.
For most selling their home while they are still living in it is concerning. This attracts them to key retirement solutions such as roll-up, drawdown, or interest-only equity releases. As interest only lifetime mortgages implies you actually make a monthly payment of interest rather than including any principle balance. It leaves the principle balance to be paid at death or a move to a retirement community.
Seek a financial specialist to find out what key retirement solutions fit your needs. You will certainly discover at least one plan that can give you the financial freedom you want. The important aspect to remember is whether or not you wish to sell your home before or after death to live a life of comfort as you may be accustomed to right now.
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