All you need to Know About Equity Release Schemes
Equity
release schemes allows older homeowners to access their property’s value for
one time lump sum fund or take regular withdrawals in future or as combination
of both. If you need to incur an unexpected expense or facing a pension
shortfall then equity release option can be very beneficial to you.
Criteria For Equity Release
Scheme:
Equity release schemes help you to get tax
free funds-
·
but
there is a minimum age of 55 at which you will be qualified to get an equity
release and
· The
particular person applying for this release also needs to have his own
residence in which he resides.
This mainly includes two types of schemes-
1. Lifetime Mortgage Scheme:
This is
the most common type of scheme availed by most. This scheme enables you to take
a loan on your residential property in return of a consideration while
retaining ownership of the property. The interest on the money borrowed is
charged but usually nothing has to be paid until you sell your home or go into
a long term care or die. The interest is compounded as there are no monthly
repayments and this effect will increase the total amount that you owe.
2. Reversion Scheme:
This
scheme is not very popular in the market as in this you would have to sell all
or part of your residential property in return of a consideration. When your
property is sold you would only receive the percentage of the property’s value
that you own.
The
fees on the schemes usually vary so it is always recommended to take the help
of a financial advisor. Take into consideration the different schemes for
finding out the perfect fit for you. Now there are many sources available for Equity Release schemes take your time and pick the most suitable choice.
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