Your home is one of your biggest assets. You have invested a lot of time, effort and money to become a homeowner. How do you ensure that your home investment starts paying you back without having to give up the ownership of the property or sell the house?
Equity release can be defined as the process of freeing up money from the value of your home or property while still allowing you to live there. Once you have accessed the money, you will not need to make any monthly payments. However, the loan together with the interest will have to be paid when you pass away.
Equity release is very popular among senior citizens who are homeowners and you have to be 55 years or over to qualify. In order to fully benefit from equity release, you will need to do your research before you dive right in.
Here are 5 important facts that will help you understand equity release.
- There Are Different Types Of Equity Release
There are two major types of equity release; the lifetime mortgage and the home revision plans. Most homeowners prefer the lifetime mortgage because it allows you to unlock and access a portion of your money tax-free and spend it as you wish.
- Typically, There Are No Monthly Payments
With a lifetime mortgage, your loan is secured against your property and typically, you will not pay any monthly installments. The loan together with the interest will eventually be paid back after you and your partner pass away or are moved into long-term care.
- You Get To Spend Your Money However You Like
Want to go on that holiday you’ve always dreamt of? Or buy new furniture? Well, with equity release, you can spend your money however you like. One great thing about the flexible lifetime mortgage is that you can never owe more than what your property is worth. Thus you can enjoy your golden years without the worry of leaving a debt to your children.
- You Can Live In Your Home For The Remainder Of Your Life
Just like any other mortgage, you get the opportunity to own your home. This means that you have the right to stay in your home until the day you pass away. There are several myths that claim that an equity release provider can at one time come for their money and repossess your home. This is not true. As long as you meet all the terms and conditions, you will be able to live in your home for life.
- Equity Release Might Not Be Right For Everybody
It is very important to understand that equity release might not be the best option for every individual. A good equity release company should be very honest with you and should tell you upfront whether you should go ahead with equity release or you should consider other options as well.
Get advice from an independent specialist. Remember, equity release is designed as a lifetime financial commitment. Avoid using it to sort out short-term financial problems.
Conclusion.
There you have it. 5 facts that will help you understand equity release. Looking for the best equity release plan? Responsible Equity Release will help you unlock resources that you never knew you had. They will also debunk the biggest myths and give you valuable information before making any decision.