An equity release mortgage is a way for you to raise money against the value of your home, which is basically a loan with no regular repayments. The provider which loans you the money will be paid back when your property is sold. An equity release mortgage can provide you with a lump sum of cash as agreed upon or you can opt for a plan that gives you monthly payments as regular income.
There are two main types of equity release mortgage plans out there that you can choose from. You can either go with a lifetime mortgage or a home reversion plan. A lifetime mortgage is when you take out a loan against the value of your property but you still have ownership of the property. The second option, which is a home reversion plan, is where you sell off part of your home to a home reversion company. With this option you will have to give up part of or full ownership of your property.
You want to find a equity release mortgage that will allow you minimal set up costs but that will give you maximum pay out. After all, most people want to get the most out of anything they do in life. As it is a long term financial plan, you need to make sure that an equity release mortgage is a good option for you. Remember that it is a big commitment and it will also reduce the inheritance you leave behind for your family as your home will be sold to pay the loan.
The plus side is that you will be able to receive money from your home while still living in it and/or there will be money from your home left behind for your family when you pass away if that is the option you choose.
An equity release mortgage can be a great solution to problems with cash flow later in life. If you are considering taking out an equity release mortgage on your home, you definitely want to make sure that you have a lot of advice and support in order to avoid any hidden costs and find the best deal available to you.
