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  • Is Equity Release Right for Me?

    First, let’s talk about Equity. Equity is the difference between home value, mortgage total, and loans that are secured against it. So, the Equity release is termed as an agreement that gives you access for the sake of cashing out money from the same equity value left in your property.

    In easy terms, equity is the market value of your home taken from any debts you have secured against it, and Equity Release is the process that turns that same equity into spendable cash or equity amount, without you having to sell your home.

     

    So, what are the criteria of Equity Release?

    The only criteria which are important to note are that you need to be at least 55 years of age, only then you will be able to cash out the amount as a small regular monthly or annual payment or the lump sum of it.

    On the other hand, when you are thinking about this process, you need to be fully aware of all the advantages and disadvantages or rules and regulations. In this case, you will have to get some professional advice that teaches you all about the rules and regulations.

    There is no income requirements or there is no credit rating scoring that stops you.

    Types of Equity Release:

    There are not many types of Equity Release but depending on your home or your home plan or the amount of payment you want, you can get two choices. These two choices are;

    Lifetime Mortgages:

    In Lifetimes Mortgages, you get funds in small overtime amounts or in a lump sum single time. Here, you will have to make up your mind about the minimum amount of money you can borrow.

    You will be able to choose whether you want to make a payment or not. This is important to consider when you are legacy planning for your children and normally it’s important to get your children involved in this decision:

    Facts:

    Home Revision Scheme:

    Just as the name suggests, the Home Revision Scheme is mainly the home plan, in which you can sell the part of your home in return for a lump sum amount or monthly payment.

    Facts:

    Whether it is the Home Revision Scheme or the Lifetime Mortgages scheme, you can live in your own home comfortably till the borrower who is last surviving is dead or has traveled from his home into extended-term care.

    Equity Release Advantages:

    Equity Release Disadvantages:

    When should you consider going for an Equity Amount?

    Equity Release is specifically helpful for you when you want to repay existing mortgages OR increase your retirement income OR looking to reduce your inheritance tax liability.

    Choosing the Best plan as a perfect Customer:

    First of all, you need to make sure that the lender you are dealing with is a part of the Equity Release Council

    There should be no negative equity guarantee, meaning the owed amount is never more than the property

    Arrangement fees or simply called the application fees should be taken into consideration.

    There is an independent product rating, which gives you the know-how on the flexible products; those not having hidden fees.

    Get in touch with Simple Financial Planning

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