Compare Equity Release
Today, the more sensible retired owners are turning towards equity release to search for greener pastures that will help them meet their rising expenses with ease. They have chosen this way to release the money tied up in their own properties for their own good.
Key features to consider:
F The basic idea of an equity release is to help you raise a mortgage against your existing property and use this amount even while you are staying in your house. You can continue to stay in your own house until you die or you move into long-term care.
F With this plan you are able to get a lump sum tax-free amount of cash or else a regular income or even a mixture of both – depending upon the type of plan you choose for such release. The biggest benefit is that you can spend this money in any way you want to without any restrictions.
F This plan helps you to also reduce the inheritance tax incurred by your family or loved ones. After receiving the lump sum or installments, you can even choose to give up the entire amount to your family as well.
F Taking up the plan does not prohibit your right to move into a new house property as far as such new property is able to meet all the terms and conditions of your existing mortgage.
F The best part of taking up equity release is that such mortgages are financed by some of the most leading financial institutions of the country and hence you can be assured that your life ahead lies in good hands!
Fees charged in equity release:
You will be charged an upfront equity release arrangement fee by your broker and the provider, as per their choice. It does not matter which type of scheme you go for since the average costs will not differ. The estimated costs can be laid down as follows:
§ Administration fee: £150 to £300.
§ Arrangement fee: £500 to £1,000.
§ Valuation fee: £200 to £500.
§ Legal costs: £500 to £1,000.
§ General advice costs: £500 to £1,000.
Tips to compare equity release:
You can compare between the basic two types of equity release schemes on basis of their types – lifetime mortgage and home reversion.
* Interest calculation: This will be a percentage of the advance for lifetime mortgages while none is charged for home reversion.
* Fall in value of property: You can protect yourself against this in lifetime mortgages by choosing a ‘no negative equity guarantee’. In case of home reversion, the provider shares with you such fluctuations.
* Rise in interest rates: While you are at no risk in case of home reversion where you need to pay no interest on mortgage, in case of lifetime mortgage you can go for a plan that charges you fixed rate over lifetime.
* Repayment: You can repay early at some charges only if you go for the lifetime mortgage scheme.
With proper use of equity release, you can live your retirement life just the way you had imagined for yourself – financially problem-free forever!