What is Equity

What is Equity Release? More and more people are using equity release to help fund their retirement. If you are over a certain age usually 55 to own a property may be published or unlock capital.

There are two types of equity release schemes;. Lifetime mortgages and home plans return

This article outlines a lifetime mortgage.

lifetime mortgage works on the same basis as interest-only mortgage with the exception that it does not make the monthly payments.

For example, a man aged 71 with assets worth £ 250,000 with no mortgage or loans outstanding against the property could release around £ 90,000. The money is paid as a lump sum, and you can spend it on whatever you want, there are no terms of what you have to do with the cash released.

You continue to live your own home, and the interest builds up on a monthly basis or on a fixed or variable interest rates when you die or the property being sold is likely to leave the welfare roll outstanding monthly payments, together spočetna amount is repaid the equity release company.

'rolled up mortgages' amount can be substantial, if a married couple aged 60 and the release of £ 45,000 today and the last survivor died in 85, assuming an interest rate of 7% compared to 25 years in the settlement price is £ 244,235.

potential problem with a lifetime mortgage interest is rolled up and a lump sum equal to more than the value of property sold in this case the company could ask for equity release financial condition of the remaining assets, this aspect of the damaged many clients who wanted to leave some legacy.

For this reason, 'no negative equity "guarantee was introduced by the Safe Home Income Plans (Ship), no matter how real estate prices vary or modify the interest rates until the company is a member of equity release (ship), the company will not release capital seek more than the value of a property was sold to settle the outstanding loan.

(board) members follow a strict code of practice must ensure a fair, simple and complete presentation of their plans, the implications of any tax questions, allow the client to choose a lawyer of his choice, and most importantly "no negative equity" guarantee.

It should be noted that (boat) is funded by the leading providers of equity release and body shop, not the actual regulator as well as all equity release plans are in the regulation of the Financial Services Authority (FSA).

key things to consider are to use a company that is a member (ship), is always financial advice, consider any tax implications may be limited in your future plans and take into account the fees and costs of taking out a lifetime mortgage .