Real Estate Options
Equity release is a process that allows homeowners to access the equity in their homes without having to sell their property. It doesn’t matter if you’re over 65 or under, it’s important for anyone who owns a home with any form of equity to consider an equity release plan. We will help you understand the different equity release options available and how they work so that you can find which one best suits your needs and budget.
Now that you have a basic understanding of what equity release is, let’s get into the different options available. The most common types are home reversion plans and lifetime mortgages but other forms include shared ownership schemes and mortgage advance products.
Home Reversion Plans: this type allows homeowners who want to convert their property value into cash or those who need additional funds in order to pay care costs can do so without having to sell their house. In return for an upfront payment, they’ll continue living in the property until death (or another agreed upon date). Once it passes over to your beneficiaries, any money left behind will be returned minus fees accrued during the agreement period such as management charges and borrowing interest rate repayments. This plan doesn’t require a repayment schedule and can be discussed with your equity release provider.
Lifetime Mortgages: homeowners who are unable to afford care costs or wish to pay for other expenses such as family members’ weddings can use this plan. You should consider speaking with an adviser before applying because there is usually interest attached that will need payment after the owner’s death, unless they have made adequate provision for it during their lifetime (much like any other loan). However, unlike home reversion plans which require at least one month of repayments per year, you’re able to choose how often you make repayments on these loans but typically expect monthly installments over either five years or until the property value has been repaid full.