After retirement, many people are facing financial problems. Now, you no longer have to worry: the equity release is the alternative of a steady income on the age when you need to focus on the beautiful side of life.
Nowadays, a lot of people use equity to help fund of their retirement. You need to be at least 55 years old and own a property you can release the equity.
This is a good way to use on the money currently tied up in your house. You'll have the chance to use this money as a source of income, without giving up your property. First of all, you have to know that you have two possibilities to use it: home reversion plans and lifetime mortgages.
Lifetime Mortgages - No Monthly Payments
With lifetime mortgages you get rid of monthly payments and your home is fully insured. This method has a lot of advantages because the increases in your property still benefit you, there is the option of a fixed rate plan and additional borrowing is often possible. However, you must keep in mind that early repayment penalties may apply, the tax position may be affected and the amount raised is often lower than with house reversion plans.
Home Reversion Plans, for Carefree Grandparents
With home reversion plans you can receive a regular income, cash lump sum or both. This method provides you a lifetime lease that guarantees you still have the right to live in your home for the rest of your life. In this way, you'll benefit from the increase in value on your share of the property, the older you are, the more cash you can release and it raises more money than a lifetime mortgage. You must take into account that if you sell your house, your estate will not receive any inheritance and you will no longer completely own your own property.
The Benefits of Equity Release
A lot of older people who chose one of these plans, say they've made the best choice for their lives. This kind of plans provides them sufficient cash to replace their salaries until they reach 65 years old, thus allowing the early retirement and no loss of pension rights. Besides that, this gives you the possibility to receive the necessary funds to undertake the repairs and modernization of your house. Thus, the value of your home increases.
If your pension has not performed as well as you expected, this equity release is the best method to get more money. You should note that over the years you've put a large amount of money into your property, and now, these amounts are locked away. The equity release gives you the chance to benefit from these untapped money. Choose between the two versions of equity release and you'll not regret!