Monday, February 10, 2014
Equity release UK
Equity release is a way to retain use of your house or other object with capital value, while still obtaining a steady stream of income. This is done by using the value of the house, and unlocking so that the cash value turns into a stream of income. By using equity release you can borrow up to 90% of the current value of your home, for many different purposes and still not have to move out of your home. This type of financing is often used by people who are in their mid-50s or older. The debt still needs to be repaid at a later stage, usually when you die. Senior citizens who do not plan on leaving a large estate for their heirs might find this type of financial management useful. An American equivalent is known as a ‘Reverse Mortgage.
Equity release can be a very valuable option for those in their later years, because it can provide a large lump sum of tax-free cash that can be paid out over the course of the rest of your life.
However, equity release can also have negative effects on your finances. Some of the disadvantages of equity release are that it may decrease the amount of money that your family can inherit upon your death, and can also reduce the amount of money that you can bequeath to charity. It also might impact the means tested benefits that you are previously entitled to. Equity release might not be a good match for some people, but it can be very helpful for others. If you are over 55 and you own your own home, it is likely that equity release could be an efficient way to uncover a hidden flow of income and create a more comfortable retirement.
There are many websites that offer equity calculators which help you to determine how equity release would work for you. You begin by entering your estimated property value, the value of the loan or mortgage currently secured on the property, and the age of the youngest homeowner. Then click the button to find out whether or not you would qualify, and how much equity you could release.
Equity release is a way for elderly homeowners to generate income from their assets, namely their house, without having to sell it. It allows you to receive the majority of the value of your house in cash while still living in it! If you are intrigued by the idea of equity release and want to find out more, talk to an expert today!
