What types of Equity release are there? Non advice.

To begin with this is in no way an article offering advice. We are going to look at the subject of Equity release which is an increasingly popular form of getting to money in your retirement. It is about “releasing” the equity in your home or in other words taking out a mortgage. You might think that you’re beyond all that now and after finally paying off the mortgage why would you want to start all that again? If you want advice on Equity Release Wiltshire then it is a good idea to look at https://chilvester.co.uk/equity-release/ first as they can help you. To be clear though none of this that follows is advice. The decision to release equity should be yours and should be careful considered.

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One option is the lifetime mortgage. This is where you take out a loan on your home. You will still own the property as you did when there was a mortgage on it originally. You can take the amount you want as one big lump or you can take it as a drawdown. This gives you the flexibility to take out what you like based on what you need. The other option is to take out an interest only mortgage on the property. You only pay the interest that the loan accrues. Again, you still own the house and you don’t pay the loan off until you sell the property, go into long term care or die. Basically when the house is sold, and it has to be sold when any of things happen the amount you borrowed will be deducted from whatever you make from the house sale. How much you can get is based on what the house is worth but also on your age as well.

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The second option is for a Home reversion plan. Most people opt for the lifetime mortgage option above but this is another that might work for you. In this option you sell a percentage of your home to a specialist equity release firm. You will no longer own the property but you will have a lease for life meaning that you live there for the res t of your life or if you decided that a long term care arrangement would suit you better. The house is sold and there is nothing you can do about that as it will be part of the terms and conditions of agreement. The loan is paid off form the house sale and the rest goes to the specialist firm.

There are costs as solicitors will be needed to draw up the plans and the people you deal with should be members of the Equity release council to ensure that you get security and peace of mind. There is no tax to pay but one piece of advice we can give you, speak to an expert advisor before you make any decisions.

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