There are basically two ways to release equity on your property you either sell it or you mortgage it. For people in the UK over the age of 55, there has been rising interest and demand for equity release products to serve an aging population that wants to live an active lifestyle. Equity release options are one way of achieving this.
I wrote a few days ago about Safe Home Income Plans (SHIP), a company who’s main aim is to provide some safeguards for people who take out equity release plans, reports that demand for equity release plans has continued to rise over the past few years according to it’s member companies survey. There are more and more products coming to market to satisfy this demand, however SHIP sounds a word of caution about the concerns over the level of advice on offer to people wanting to know about these products.
How can I release the equity in my property?
For people over 55 taking out a mortgage is an option. Finance companies, banks and building societies have designed special mortgage products that are meant to run for the rest of your life. These mortgages are called Lifetime Mortgages.
The loan is secured against your home so the value of your property is a major factor, along with factors like your age and your health. With this type of product you life in your home and the load is repaid when the property is eventually sold. Sometime after you die.
Another way of releasing equity in your home, is to sell it, or part of it in what is known as a reversion scheme. With this method, you sell either all or part of your home to a reversion company and you continue to life in it for the rest of your lives. Once you are no longer here, the property is sold and the reversion company receives a proportion of the sale proceeds. The rest is passed onto your estate.
As you can see, there are options for releasing equity in your home, that allows you to have a lump sum to live on and enjoy later years.
IMPORTANT NOTICE: I am not nor have I ever been an independent financial advisor. Neither am I registered under the Financial Services Authority. I am therefore not authorized under the Financial Services and Markets Act 2000 to offer investment advice.
The purpose of these articles are to inform, not to advise. Seek professional, impartial, independent financial advice from someone who is qualified and authorized before making the financial decision to take out an Equity Release Mortgage.