Equity Release Schemes
Well, it is the process where you free up (release) some of the money (equity) that is stored in your bricks and mortar.
As we all know, houses are rather expensive things. Once you have paid off the mortgage then you own the house yourself, but whilst you are living in it, you don't of course get the money - that only happens when you sell it. So there is a large store of wealth in the bricks and mortar around you which you can't access, apart from the fact that if you didn't live there you would have to pay that sum to buy the house and have the privilege of a roof over your head.
The fact is that with people's pensions starting to go south or not be present at all, more and more people now cannot - and even more in the future - live off pension and savings alone. In other words, there is a deficit between the money they have and the money they need. If going back to work isn't an option, either for reasons of age, ability or desire, then how do you get the money you need that is locked up in the house?
The answer is to undergo some sort of equity release and free up the money, which may take the form of a lump sum, or could be paid on a monthly basis or even as and when needed.
There are two main types of equity release schemes out there, and thesee are known as home reversion plans and lifetime mortgages respectively. These are discussed in more detail in the two articles that follow on, called home reverson plans and lifetime mortgages respectively.
Whilst both are quite different products and therefore consider careful consideration, before looking at either in detail, it is worth remembering the common feature: that they both enable to live in your home until you die, and there is nothing for you to pay until the house is sold or until you die. The financial ramifications in that circumstance come in both cases for the estate.
More property related articles:
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- House prices in PL6 7
- House prices in BR5 1
- House prices in EN3 4
- House prices in RG1 3