If you are a pensioner and you are looking for the key retirement solutions, then equity release might be what you are looking for. Equity release applies to home owners who are looking for a way to release equity from their homes. There are many different equity release schemes. Based on the scheme that you choose, you can either receive lump sum cash or you can receive a series of payments via drawdown.
In most cases, equity release involves taking a loan against a property. Unlike other loans, equity release does not require any monthly repayments. The money that you receive can be spent however you would like to spend it. One of the greatest advantages of equity release is that you can stay in your home as long as you like and retain 100% ownership of the property. Although there is one solution that requires you to sell your home, which is the home reversion plan - for further information on home reversions visit www.RetirementMortgages.org.uk.
When applying for equity release, each equity release scheme can be customized to meet your needs. The disadvantage however is that an equity release scheme will eventually decrease the value of your property. However, this can be offset somewhat by any potential increase in the value of your property. Basically what this means is that you will not have as much equity in your home to take out in your later years when you have a customised option. Yet with the increase in property value your home could actually increase in value enough to extend your equity a little further. The most important thing is for you to look at key retirement solutions for the best one regarding your circumstances.
A person must be at least fifty-five years old in order to apply or an equity release scheme. You need to own a property that should have a value of at least fifty thousand pounds. If possible, there should not be an existing mortgage on the property. If there is an existing mortgage on the property, it will need to be paid off by the equity release scheme at completion. If you decide on a home reversion plan you will need to be 65 years of age.
The three main types of equity release schemes include: the lifetime mortgages, the interest only lifetime mortgages, and the home reversion plans. Each plan allows you to release cash from your own home. The lifetime mortgages allow you to take a loan against the property, while the home reversion plan gives you the opportunity to sell a percentage of your property. In both cases, you can remain in your property as long as you like.
A nice thing about the home reversion plan is that you can sell as much of the property as you want, but you live there rent free. You will have a lifetime tenancy agreement for you and anyone over 65 named in the contract. This means your spouse, if they live longer than you, can remain in the house. Additionally, you have more property to sell if you need more cash without the worry of interest payments or paying back the principle of the mortgage.
Lifetime mortgages as key retirement solutions require a repayment of the loan and the interest. It can mean the sale of your home with little to no inheritance for your family after you are gone. This is certainly something to compare between the three plans in discussion.
Keep in mind also that while you have an interest only plan where you make interest payments, but keep the principle balance on hold till the end that you need a sizable disposable income to cover those payments.
Many pensioners are sceptical about equity release due to previous adverse commentary; however the fact is that they do not need to worry. The Financial Services Authority guarantees pensioners their safety. In 1991, Safe Home Income Plans also known as SHIP was established to provide home owners with the assurance that they need thus allowing them to apply for equity release.
So if you feel like most that life is for living and you have already discussed equity release with your children, then go ahead and 'live a little'. Always remember that you can compare key retirement solutions for the best option. You do not have to choose one within a certain timeframe either. Just go at your own place to get the best product. You have plenty of different products some of which are not mentioned, but they may be more key for your retirement needs versus those that are.
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