Equity Mortgage Release

Equity Mortgage Release

Equity mortgage release is a mortgage scheme specialised for elderly individuals over 55, which allows guaranteed lifetime occupancy in the property. The cash generated from the equity mortgage release allows the borrower to use the cash as they please, even allowing them to invest in an annuity, which provides an income for the rest of their lives. Equity mortgage release products are used in a number of different ways, in some cases as a means of income support to merely maintain residency at a property, or it may be used by retirees who aim to improve their current lifestyle. Our advisers are specialised in providing advice on equity mortgage release, which will ensure the individual can obtain when most suitable plan of equity mortgage release.

Before seeking assistance on considering an equity mortgage release, the borrower must be aware of the fact that equity mortgage release is divided into two main schemes, known as a lifetime mortgage or a home reversion plan.

Lifetime mortgage equity release schemes functions by giving the borrower the opportunity to pay the entire mortgage back when the arrangement is terminated. The arrangement is only terminated when the borrower dies or is admitted to a care residence for the remaining part of their life due to deteriorating health.

The plan holder has the option of selecting up to one of three products of lifetime equity mortgage release. The first of the three products is known as interest only. This product allows the plan holder to repay the entire mortgage back at death, although a variable interest rate is still paid monthly. On the other hand, the borrower can select to arrange an interest rollover lifetime equity mortgage release, which enables the plan holder to pay the mortgage along with the interest back during the event of the plan holder’s death. During the arrangement, the non-fixed interest is calculated on a monthly basis and added to the total debt along with the mortgage payment.

Another alternative form of lifetime equity mortgage release is the home income plan. Instead of using the cash generated from the arrangement for the borrowers own wishes, the cash may be used to purchase an annuity, setting up a guaranteed lifetime income for the plan holder, which would contribute to paying off monthly instalments of the mortgage accompanied by interest. Our job is to seek the most suitable and cost-effective form of equity mortgage release for the borrower.

Equity mortgage release plans have an alternative scheme to the lifetime mortgage plan. This is known as the home reversion equity mortgage release plan. This is where the plan holder receives a non-repayable lump sum of cash, in exchange for the provider holding shares in the property. The agreement may allow the provider to gain all shares in the house or just a percentage of the shares. Home reversion equity mortgage release plans guarantee occupancy for the borrower until death.

This type of equity mortgage release plan also supplies the borrower with many rewards. The borrower does not need to make any monthly payments for the rest of their life and the money can be used as the borrower wishes. Moreover, there is a possibility that the borrower’s inheritance is able to retrieve some equity in the estate, although this is only possible in a part home reversion arrangement. Nevertheless, with these advantages follow many disadvantages, such as restriction to the borrower’s ability to move homes as the owner loses full ownership in the property. This also limits the plan holder’s ability to contribute to future growth in the property, along with the fact that the process would be very costly if the plan holder were to die soon after the arrangement was made.

When considering applying for an equity mortgage release, there are many risks associated. The plan holder must be sure of the terms of the arrangement and how the benefits from the equity mortgage release will outweigh any alternative solutions. With the aid of our assistance, we can insure our clients acquire the most appropriate equity mortgage release scheme.

This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.

CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT IT. IF YOU ARE IN ANY DOUBT, SEEK INDEPENDENT ADVICE.

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This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.

CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT IT. IF YOU ARE IN ANY DOUBT, SEEK INDEPENDENT ADVICE.