If you’re property-rich and strapped for cash, you have probably heard about equity release schemes and how they’re changing a lot of people’s lives.
Well, if you haven’t, you shouldn’t worry.
Basically, equity release schemes allow you to unlock the equity from your home. They come in two forms – lifetime mortgages and the home reversion plan. A lifetime mortgage typically involves taking a secured loan on your residence, and you don’t have to pay until you die or move into residential care.
Home reversion plans, on the other hand, involve selling of a portion of your estate to get valuable funds. They are the best option if you want a guarantee that you’ll leave a percentage of your property to your kids or any other beneficiaries.
Be sure to check out sovereignboss and see how much you can release by using the equity release calculator.
Understanding Equity Release
According to financial reports by various companies, equity release plans are slowly taking over the market, and most people prefer them to traditional mortgages.
Most seniors are opting to take the equity from theirs to finance their retirement or even to supplement their pensions or incomes. Equity release allows them to enjoy the benefits of having built such equity while also maintaining the ownership of their estates and assets.
Well, here are some of the reasons you should join this percentile and get yourself an equity release plan:
Features of Equity Release Schemes
There are a variety of reasons why retirees are opting to take out equity release plans, and some of these include:
#01. You Get to Reside in Your House
One of the most significant benefits of equity release plans is that, according to federal law, you have the right to reside in your home until the life of the loan ends.
As per statistics conducted by several psychological associations, selling your family home and moving to a new environment can cause not only emotional stress but also physical turmoil to 70% of the population.
There are also the expenses associated with moving like solicitors fees, moving company fees, removal costs, stamp duty & the emotional price of up-rooting you and your family from a place that you’ve spent the majority of your life bringing up your offspring & other family-related matters.
By taking out an equity release scheme, you can be able to maintain your independence & have the right to remain in your family home for as long as Mother Nature wills you to.
#02. You Live a Life of Luxury
100% of the people that take the equity from their homes get to fulfill their dreams, retire peacefully, and relax.
Some choose to go for the long-awaited holidays to foreign and exotic locations. Others, on the other hand, opt to purchase a brand new Lexus or any car of their choice or to carry out those home renovation plans they’ve been dreaming of for years.
For others, it’s merely pleasurable spending cash on their family by gifting their children now, rather than later and seeing them enjoy bringing up their grandchildren without the monetary constraints that the modern society is imposing.
#03. You’re Guaranteed Returns
Almost every equity release plan provides you with the benefit of having guarantees throughout your life. It can be the guaranteed interest rates for your lifetime on your prestigious enhanced lifetime mortgage scheme or, for your income lifetime mortgage plan.
There’s also the no negative equity guarantee that the lifetime mortgage plans also have, ensuring that all equity release schemes are adhering to the Safe Home Income Plan (SHIP) regulations. The no negative equity guarantee makes sure that your successors can’t ever incur any debt over & above the estate’s market value once you have passed on or moved into residential care.
Therefore, if you’re still considering taking an equity release plan, you can see the various perks you’ll be enjoying, and they’re not limited to those, there are many more pros to taking out an equity release scheme.
You have to ensure that you consult with your financial advisor before you head out to take out one. They’ll help you know what your particular needs are and advise you accordingly.