Equity release schemes help many retired people to release funds from their biggest asset, their home. The funds that are released can be used for any purpose. Some may choose to spend money on home improvements, others may prefer a once-in-a-lifetime holiday. It is also possible to use the money freed up to provide a long-term boost to retirement income. Equity release schemes are not ideal for all people. They will reduce the estate left to any beneficiaries, and they can also reduce eligibility to state benefits. All providers offer free and no obligation advice to help people understand the advantages and disadvantages of these schemes. There is an industry body, the Safe Home Income Plan, whose members provide three guarantees to all their customers. These include a no-negative-equity guarantee, ensuring that no customer will ever end up owing more money than the value of their home.
Equity release schemes are a way in which many retired people can free up funds from the most valuable asset which they have, their home. People choosing to do this are able to remain in that home for as long as they wish to do so.
The money that is made available through equity release can be used for any purpose. It is often used for the payment of debts, for instance credit cards/store cards, but it could also be used for many other things, such as holidays, home improvements, or helping out other family members.
The typical person who is eligible for equity release, will be aged 60 years or over, and will own their home with no outstanding mortgage. Most homes, with the exception of those of much lower than average value, should be eligible.
Most providers will offer a number of ways in which the funds can be paid out. It is possible to choose a lifetime income option, providing a guaranteed long-term boost to retirement income, or it is possible to choose a lump sum, or a draw-down option.
These schemes are not ideally suited to everyone, and providers will explain the disadvantages as well as the advantages to any applicants. The funds released will reduce the amount of the estate which can be left after death, and they may also change a person’s tax situation, and may change their eligibility for certain state benefits.
Also, as is true for any form of mortgage, some fees will be charged. Typically these arrangement fees will include solicitors’ and surveyors’ fees.
There is an industry body, the Safe Home Income Plan, which works to regulate the scheme providers. Members of this body provide a three-part guarantee to their customers. Firstly there is a guarantee of no negative equity. No one will end up owing more money than the value of their home. Secondly, people in these schemes will always have the right to remain in their home for however long they wish to do so, and finally they will have the ability to move to a different home, while keeping their equity release scheme, without having to pay any penalties or additional charges.
Related Posts :
