As a market continues to grow, people expect to see other lenders follow the lead of pure retirement. That will not only improve customer choice but also encourage healthy level of competition.

1. Equity Release is Financial Tool
for Older Homeowner
Submitted by
Pamela thomas
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2. Equity release is a process though which people can take lump sum amount
after retirement. Taking out an equity release is a very important decision. So it
is necessary for you to take much information as possible. Equity release
compared provides you information about what is available in whole of UK
equity release market and also gives you equity calculator to calculate your
equity.
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3. How does it work?
Equity release is a financial vehicle by which people who are exact 55 and
above can use the equity schemes. There are numerous schemes are available
in the market. So you will have to take an advice before which one you would
like to go with.
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4. Equity Release Schemes
There are two types of equity release schemes and these both are different.
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5. Lifetime Mortgage
With this schemes you can release equity from your property, either lump sum
or drawdown arrangement. You won’t have to repay monthly to your lender.
Your interest is rolled up and is payable on sale of your home when you die or
move. Moreover most deals come with “no negative equity” guarantee.
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6. Home Reversion Plan
In home reversion plan, you can sell all or part of your property and in return
you receive tax free regular income. You can continue to live in your home as
long as you wish. Percentage you decide to keep in your property stay the same.
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7. Take Advice
Advice is necessary for those considering an equity release plan they are more
complex than standard mortgage. It is important that you could understand
what you are signing for; it is always advisable to do some research before
contact with any lenders. It is essential to choose financial adviser that have
experience in dealing with equity release product. Since people need an up to
date information and knowledge of full range of product.
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8. Pros of Equity Release
•Security point of view: stay with your property for life time or until you move into long
term care.
•Access your amount: get your hand on equity and take a lump sum or regular income
•No monthly repayment: Interest on a lifetime mortgage is paid on your death.
•Always positive approach: you and your estate will never owe more than the value of
your home
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9. Cons of Equity Release
•Inheritance: it may decrease the amount of money your family will inherit after your
death.
• Expensive: it is more expensive then selling the property to equity.
•Area benefit: equity release can affect your eligibility for certain state and have tax
applied.
•It may impact any means-tested benefits that borrower may be entitled to.
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10. Conclusion
As a market continues to grow, people expect to see other lenders follow the
lead of pure retirement. That will not only improve customer choice but also
encourage healthy level of competition.
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