Homeowners, throughout different times in life, might explore the idea of remortgaging to release equity in their homes. By accessing the money, they can use it or spend it to clear any loans, home improvement, or maybe to support someone, or for any other purpose.
Lately, there has been a noteworthy increase in the number of landowners aged fifty-five and over that are looking for companies that offer equity release and taking out lifetime mortgages.
There is no need to say that choosing to release equity in your home is a significant financial decision, so it is wise to understand the process and be clear about all the factors, including advantages and disadvantages as well. In this guide, you will find everything about equity release that you need to know, to help you to make a decision.
Understand the Concept of Equity Release
Equity release allows property owners to access money based on the market value of their home without selling it. It is a kind of financial business that mortgage providers offer to property owners aged over fifty-five so they can have money in exchange for a repayment contract.
Types of Equity Release
There are two kinds of equity release plans available on the market. You might not know the difference between them, so here we have explained the key differences:
Home Reversion
Home reversion is an equity release that involves selling all your property or a part of the property to the providers in exchange for money. One can either make a lump sum or regular payment. After this, you won’t own your place, but you can still live in it. If you have sold a part of the property, then you will be the partial owner of the home.
Lifetime Mortgage
This is the common form of equity release that most people choose. A lifetime mortgage offers an opportunity to repay the interest rather than accumulating it. This especially suits those people who are worried about how much this type will reduce the inheritance of their family. This type also gives you the flexibility to set the amount of the home’s value that you want to be paid as an inheritance.
Research Well
When you come to equity release, you will find unlimited companies who provide this service. Therefore it’s advisable to research well the ones you are considering working with, checking that the company is legal and authorised to practice. If you are confused about deciding on a company we can help you to find the one that suits your requirements and needs. Visit Think Plutus as they will fill you in and help you to decide on the right type of equity release.
Benefits that Equity Release Offer
There are several different reasons homeowners decide to use equity release including that it provides people with financial freedom.
This scheme can help people in a numbers of other ways, including:
- Reducing inheritance tax.
- Paying off debts or other loans.
- To renovate a home or to make any other improvement.
- Help you in a big purchase like a car or any other thing.