Equity Release Schemes – A brief Knowhow

When there is an ad hoc requirement for funds, it is often that you may find a need for a source of fund. Many people invest in a manner where there are lock in limitations. Equity release is an option where one can access the wealth created in one’s property over a span. In these kinds of schemes, one can have released small and large sums at nest to no hassle.

Process:
This usually allows a person access to a sum which is the home’s open market value sans or reduced by any mortgages and debts on it. Thus, it is usually an option when there no mortgages upon the home.

Some of the common features which average equity release has are:

• The option requires the applicant to be over a certain age.
• The owner will continue to maintain and live in his or her home.
• A regular income or even a lump sum in cash may be secured as a result.

Types of equity release schemes:

In method 1 known as Lifetime mortgages, interest is charged on a certain portion of the value of the home borrowed. The debt is usually repayable on death. One may receive the release funds in instalments or in the form of a sizeable sum at once.

Home reversion schemes involve selling off a part of the home to a reversion or provider company. The seller continues to live in the home till death or till the release seeker goes in for a permanent care provider. The reversion company buys a portion at a value lower then market price. When finally the property goes to the reversion company, the portion of the sale price which belongs to them and rest may be passed off as inheritance.

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