The difficulty of retirement is that money simply does not go as far as it used to. When you were working and saving money for your retirement you could not have foreseen the economic downturn that has occurred or for that matter how unbelievably high the cost of living is. If you have retired or are in retirement age and are feeling the pinch then there is another path available to you. Prudential lifetime mortgage plans provide you with extra funds to live on in your retirement, as long as you own your home.
Equity release is known as a scheme, but don’t let the word throw you. It is becoming a valuable and worthwhile consideration when it comes to planning your retirement. The purpose of equity release is to help you make your retirement simple and as care free as possible.
Equity release is a scheme which allows you to raise cash from your current property. There are two kinds of equity release schemes. The first is home reversion. The second is a Prudential lifetime mortgage scheme.
In either scheme what happens is that you raise cash against your property either all at once in a lump sum or you could choose to receive it as a regular monthly income. Through this scheme you, and your spouse or partner, will retain the right to live at the property until both of you pass away or move out. Or alternatively if you or your partner already own an Equity Release Scheme and wish to switch schemes we recommend using a switch plans calculator.
These are not easy things to consider. But if you are planning your retirement and you are of retirement age, over 60 for example, this is a good option to consider. You should look at all options and the variations in requirements before deciding on one particular plan. The Prudential lifetime mortgage is set up for those 60 or over; however, there are other companies willing to offer a plan for those 55 and older.
It takes some research and understanding of the market to make a good decision. Ignoring other companies and potential schemes because you like Prudential or it is a news release telling you about their product alone does not help you make the right decision about your retirement and the inheritance you leave behind.
A lifetime mortgage is a loan with interest and a principle balance to be paid back. It is paid upon your death or when you relocate to a care facility. It is typically repaid by selling your home; however, there are options where your beneficiary can get a regular mortgage or pay off the mortgage with money they have saving the home from sale.
You can generally obtain 20% to 44% of your home equity in a lifetime mortgage. It is again dependent on the provider of this scheme. Prudential requires you to be 60 at least and the younger you are the less you can obtain in your home equity. You can always refinance later with a new plan if your home increases in value or to get more equity out of the home if there is a percentage left that would not go over the value or rules of the company.
According to EquityReleaseNorthernIreland.com, the Prudential Lifetime Mortgage is a standard plan. It is not an interest-only plan; however, if you need an interest-only plan you can ask if they have a lifetime mortgage available where you pay interest each month until you move or expire.
You may also find that Prudential is willing to offer one of the newer drawdown schemes in which you take a small lump sum and then smaller amounts as needed until the account is empty or you no longer need funds.
As you can see there are a variety of options available to you and your lifestyle in retirement. The key is to choose the path that best fits your needs. This may require you speaking with a Prudential adviser and an independent adviser.
You also want to look at home reversion
• In this scheme you sell a part of your home for tax-free, interest-free cash. Since you sold a part of the home, you do not have a debt.
• The rest of the home is sold when you die or move to a facility.
• You also have to be 65 years of age to qualify.
Obviously there are plenty of choices out there to consider. As you speak with a representative about Prudential Lifetime Mortgage choices think about what your family would want for you. They may be willing to help out and that can keep your mortgage lower.
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