By the time some people reach their 60s or 70s, their incomes normally take a plunge, thereby leaving them cash poor but rich in assets, especially if they have their cars paid off or have most of their equity tied up in houses. In order to enjoy some of the fruits of their wealth, then, they may choose to take out equity releases. However, this is not a scheme that you should consider lightly. The following information will assist you in formulating a decision.
You Want to Avoid Moving
One way to avoid being cash poor is to downsize to a property that is less expensive. However, by the time most people retire, they really do not want to move. After all, they are used to their homes and would rather avoid the stress involved in moving house. An equity release is the ideal solution for them.
How an Equity Release Works
Unlike a regular mortgage in which repayments are made, the interest of an equity release rolls up and the terms are completed when one person out of a couple dies or the homeowners move into a long-term care facility. At that time, the loan plus interest is repaid to the loan provider.
However, when opting for this plan, you need to consider its effect on the value of your estate and its impact on any inheritance you wish to bequeath. The financing choice can also affect the payer’s rights with respect to state benefits.
Where to Go to Find Out More Details
So, before you proceed with an equity release, you may want to go online and check if this type of financing is designed for your lifestyle or temperament. Insert your information into a mortgage equity release calculator to see where you stand in this respect. For example, you will need to include the following information:
- Your address and postal code
- The property value of your home
- Your age
- Your email address and telephone number
You Can Live in Your Home until the Plan’s Completion
When this information is input for calculation, you can get an instant answer to just how much you can receive when you use this type of plan. Also called a lifetime mortgage, an equity release permits you to receive the money you need and avoid the hassle of moving. In fact, all lifetime mortgages enable you to continue to live in your home until the completion of the plan.
However, that does not mean that you cannot move and still hold onto the financing. For example, you can transfer your lifetime mortgage to another property without any fees or penalty. Or, if you wish to downsize at any time, you can take the proceeds from your home sale and repay the mortgage in full. As long as you choose a provider that offers this type of latitude, a lifetime mortgage may be the solution that you are seeking. Depending on the plan you choose, you can take a minimum of £10,000 in cash whilst leaving the remainder in reserve until you need to use it.