If you are reaching near retirement age and do not have sufficient savings to live on after you can no longer work, an equity release mortgage may be some great news for you. Without having to sell your life long home, you can cash in on its value to fund your retirement. Many persons find that they are able to live comfortably in retirement in their own home.
Once many people end their career their income drops. While their home may be paid in full the drop in income is often sufficient that they struggle with some of the basic necessities of life even without the mortgage payment. Even homeowners without the means to meet basic expenses are headed for trouble if they do not find a way to increase income.
With an equity release mortgage, instead of you paying for your home every month, it pays you. The equity you have built in your home can be paid to you either as a monthly amount that is determined by your age and the value of your property; as a lump sum or as a combination of both. The equity released can be used for anything you decide. The monies you have received in the equity release will be paid back when you or your heirs sell your home.
In order to qualify for this type of mortgage, you must be at least 55 years old. This helps to ensure that the monies you receive will be paid in full when the property is sold. These mortgages work in two ways, the roll-up mortgage and the home reversion scheme.
The equity release mortgage, otherwise known as a lifetime mortgage, allows you to borrow money which is secured by the value of your home. The monies and interest you owe on the mortgage are added each year to the total of the loan. These plans often offer fixed interest rates that do not change. Once the property has been sold, the debt will be repaid and the remaining funds are returned to your or your heirs.
The home reversion plan allows you to choose the amount of money to be received, by deciding of the percentage of the property that is to be sold to the reversion company. Factors that determine the amount you will receive include your current health, age and the value of your property. Once both you and your partner have passed on or if you decide to sell the property, the total of the mortgage is taken from the property sales proceeds.
Equity release allows you to have the money you need to enjoy your retirement years while still retaining ownership of your own property. As a property owner, you are not paying rent and not answerable to a landlord. You still have the freedom to use your property as you see fit. You have the freedom to have pets and overnight guests that you may not have as a tenant in a rental property. You can also choose to sell property at any time, but you must realize that the mortgage will be taken from the proceeds.
An equity release mortgage allows persons to leave an inheritance to heirs while still having enough funds to live well during their retirement years. The monies that you receive from the mortgage will help you to have enough money to meet all of your living expenses.
An equity release mortgage can be of great assistance in terms of allowing you to have the money with which to live and still keep your residence. We’ve got the inside scoop on the lifetime mortgage .
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