Equity release is a way to unlock the value of your property and make money out of it. You can choose whatever is best with the amount you borrow. You also don’t need to have fully paid your mortgage before you can apply for equity release. You need to be at least 55 years old to qualify.
Lifetime mortgage
You can borrow an amount of money tied up to the value of your home. You can decide whether you will get a lump-sum amount or small amounts over an extended period. You should determine when and how much to repay and have a clear understanding of the terms before opting for a lifetime mortgage.
Home reversion
For this plan, you need to be at least 60 or 65 years old to qualify. You can get a tax-free lump sum value based on your home’s value or a portion of it. You can stay in your house rent-free until you die. After your death, based on the property value, the lender and the people you want to receive the money will split the amount. You might also be uncertain about how much it will sell for because it depends on the market value.
Read the small print
Be careful in choosing the equity release company you partner with. Find out how much the interest rate is before you decide to sign the deal. Even if you borrow only a small amount of your home’s value, it could balloon to a significant amount if you live several years more. Add to that the legal fees and application fees you need to pay. Before you know it, your property might no longer be worth anything by the time that you die, and your estate will be in trouble.
A few tips
To ensure that you make the most of equity release, here are a few reminders.
- Don’t borrow everything you need in one go. Try to acquire a small amount now, and wait for some time before you borrow again.
- Avoid borrowing money for investment purposes. At that age, you need to borrow your money to cover what you need for the rest of your life. If you borrow £40,000, for instance, it will be good enough for several years.
- Get advice before you take the loan. You need to understand the full details of the process along with the specific terms and conditions. You need someone who will make things clear for you before you decide to take the loan.
- Check the impact of this loan on your benefits. If you have cash instead of property, find out how it can affect your pension credit or universal credit.
You will receive lots of benefits from choosing equity release, but you need to decide carefully the amount you need, and what to use it for. Otherwise, you are wasting the value of your property. If you are interested in applying now, take a look at http://www.55plusequityrelease.com and consult them first. Let them know what you need, and they will give the best advice.
The post Important Information You Need to Know About Equity Release appeared first on Statii News.
source http://news.statii.co.uk/important-information-you-need-to-know-about-equity-release/
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