Equity Release Loans provide a way for those over 55 (or in the case of joint applicants, both are over 55), to release some of the equity built up in their home without having to make monthly repayments. |
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Under an Equity Release Loan scheme you keep full ownership of your property but you obtain a secured loan, paid as either a lump sum or monthly income (or both).
There are currently three different types of equity release loan:
Equity release - Lifetime Mortgages
Lifetime mortgages are specialist mortgages aimed at those over 55 (or in the case of joint applicants, both are over 55), who want to release some of the equity built up in their home. Under these schemes you keep full ownership of your property but you obtain a secured loan paid as either a lump sum or monthly income (or both) and you do not repay the mortgage during your or the last survivor's (if joint application) lifetime, or until you finally give up owning a home whichever is the earlier.
The most common type of lifetime mortgage does not require you to make any repayments at all until you sell your home; instead the interest is rolled up and added to the amount your owe.
Some providers also offer interest only lifetime mortgages where you pay the interest in the same was as a normal mortgage, and only repay the loan when you sell your home.
To find out more about Lifetime Roll Up Mortgages click here.
Equity release - Interest Only Mortgages
There are a few Building Societies and Banks that are prepared to offer ordinary Interest Only Mortgages to retired people, to allow them to release capital. Interest Only Mortgages mean that you only repay the interest not the capital to the lender, therefore, the monthly repayments can be relatively affordable. To find out more about Interest Only Mortgages click here.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Equity release - Home Income Plans
Under these schemes you take out a an Interest Only Lifetime mortgage for a percentage of your property to a provider who in return gives you an annuity (a regular income for the rest of your life based on your age and sex). Unlike a reversion scheme you automatically have the interest on the loan deducted from the annuity payments each month.
You then benefit from any surplus the annuity provides.
To find out more about Home Income Plans click here.
For a further comparison of equity release schemes click here.
All equity release products involve borrowing against, or selling all or part of your home, and may work out more expensive in the long term than downsizing to a smaller property, and may affect your entitlement to State benefits and grants. There may be more suitable methods of raising the funds you need.
Which scheme is right for you will depend upon your individual circumstances. If you would like further advice please complete our equity release enquiry form and one of our trained consultants will call you back shortly.
Alternatively please feel free to phone The equityRelease Centre on
0118 957 2677 or click through to our Equity Release Centre home page and follow the links from there.
You will always receive courteous service in the strictest confidence from highly trained staff who all value your custom. Your business will be dealt with in a friendly, efficient and personal manner at all times.
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