Release equities to remove your financial troubles’ – this oft-touted slogan does not intend to popularize a myth but preach a reality. You need to release equities only in the event of financial drought and to experience of heavy money shower till your last breath. Equity release sprouts as the most feasible solution when the tentacles of financial quagmire seem to strangle you to death.
The facility to release equities is exclusively reserved for the retirees’ regiment. The aged property owners are allowed to make the most of the equities that are well-secured within the property. Both the owner’s age and property condition are of significant concerns to the equity release lenders. On the basis of these two factors, the lenders decide how much to hand over to the applicants.
Equity release policy is available in various schemes to meet diverse needs of the individuals. The most popular policies are lifetime mortgage and home reversion plan. With the first type, you enter into an agreement with your lender to gain an uninterrupted flow of income till your death. The most advantageous feature of this scheme is the retirees enjoy the increased value of their properties. So, when the equity release lenders foreclose the property, after paying the loan off, the balance is retained by the real estate owners. Lifetime mortgage plan comes with some variations depending on the nature of interest rate (for example, fixed or variable figure).
The other category of equity release is known as home reversion plan. This is an option to sell your property at a discounted price but in exchange you earn permission to live in your house without paying rent. The word ‘reversion’ here ascertains to the fact that the equity release lenders are ultimately entitled to the ownership of the property. More money can be secured through this scheme as compared to the lifetime mortgage and so is a good solution for the older home owners. It is possible to release equities by selling a portion or the entire property.
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