Have you been thinking of taking out an equity release mortgage lately? Well, it will be best to consider what your options are and also why you really need to make such an important move. What an equity release schemes does is to enable home owners to get money from the present value of their homes but still giving them the opportunity to live in their houses for many years and until death or moving into a residential care home.
Due to the increase in many homeowners considering equity release schemes, there have been many equity release plans introduced into the market that have been designed to make the process easier for all homeowners. Over the years, there have been many publications in the UK that have considered equity release mortgage plans to become an essential of the kit bag for retirees. Lately, even the general press have now succumbed to the realization of how important they are in stimulating retirement for many. There is also the spin offs such equity release schemes have in helping local economies & tradesmen with the additional work they generate through home improvements & extensions.
Calculating your Choices
Whether you want the interest only type of lifetime mortgage, the roll-up lifetime mortgage, the home reversion plan or the drawdown lifetime mortgage plan; it will be best to have amounts calculated using the equity release calculator. It is best for every home owner that lives in their home with family to make the family known to what is going on and also to be aware about the scheme in order to prevent any surprises that might lead to arguments at a later date.
Interest only lifetime mortgages work to your advantage because you pay a monthly payment on the interest that accrues keeping the principle balance in check. You will also have the choice of how much of the interest you wish to repay which can then suit budget & your affordability. Making any form of contribution towards the interest charged will deter the compounding effect over the long term and save many £1000’s.
Lifetime mortgages come in a variety of different shapes like the interest only. Lifetime mortgages can be drawdown or roll-up in their terms. In the roll-up the interest accrues and you gain a lump sum of money. With a drawdown you receive a smaller lump sum, interest accrues on that, but you can go back anytime to gain more funds. These funds sit in an account for your use. Interest is only charged on what you take out.
Another type of lifetime mortgage is the enhanced or impaired option in which someone with a serious health condition can gain a larger lump sum of money based on the fact the repayment for the lender statistically will come in quicker. The enhanced lifetime mortgages (Found at http://www.EnhancedLifetimeMortgage.co.uk) have become increasingly popular as a method of clearing mortgage and credit card debts, especially when the absolute maximum has to be squeezed out of the house.
In speaking about the different mortgage options, home reversion must also be mentioned. Home reversion is not a mortgage involving interest accrual. It is a sale of your home. In this option you must own your home 100% or will be using the home reversion to pay off the outstanding mortgage balance. The home it then a part of yours and a part of the reversion company. You can live in it for the remainder of your life rent free under a lifetime tenancy agreement that is drawn up with your solictor. The drawback is that the home is only partially yours and the remainder will be sold on death or when you need more funds. It does guarantee an inheritance as long as you keep a portion of the home unsold prior to your death or move out.
Advice Makes Better Decisions
Many people know about the lifetime mortgage plan because it is has been known to benefit home owners more than the others. However, you can consult an expert to help you by giving you some advice on what terms will work best for you and also assist you in finding the best type of plan for you and your home. Check your advisers qualifications & whether they can offer the best option of providing you with face-to-face equity release advice. Discuss their remuneration basis & negotiate.
Using Equity Release to Your Advantage
Many people do not keep their homes in the best of condition but decide to apply for equity release schemes. Well, the disadvantage with that is the fact that; you might not get a reasonable sum. This is because if your home has so many issues like maintenance of building and old age; it is depreciated in value. Wherever you are, it is best to know that owning a house can bring you more than having a roof over your head.
Through equity release mortgage you can increase your home's value during a disadvantage into an advantage like the ownership of your property for funds. Always consult a financial adviser, calculate the cost of the mortgage, and incorporate your family into the decision before you make the choice on which type of equity release plan is best for you.
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