Whether you’re cooped up on your cosy couch at home and are working on a project or you’re trying to find a way to publish your ‘Mysteries of the Night’ novel, equity release can help you make the most out of it. What’s more, with the house equity release calculator, you can figure out how much you are eligible for and can start making plans to have your book published.
Understanding Equity Release
Equity release1is a mortgage plan that allows homeowners to unlock the equity tied up in their estate by turning it into a cash lump sum or monthly income. The scheme offers you two options, the lifetime mortgage plan or the home reversion scheme. It also allows you to retain the ownership of your property until you move out permanently or die – which is when your plan provider will put up your home for sale and take their share of the loan amount and send the balance to your heirs.
The lifetime mortgage plan allows proprietors within the remits of the UK and those aged 55 and above to untie the capital tied up in their estate. It doesn’t require one to pay any monthly repayments, and you repay the mortgage when you pass away or move into residential care. When the loan’s lifetime ends, you pay the loan amount plus all the interests accrued over time. However, some options allow you to pay your interests earlier, like the voluntary repayment lifetime mortgage.
The scheme also comes with other options. There’s the income lifetime mortgage, interest-only mortgage, drawdown lifetime mortgage, enhanced lifetime mortgage, among others. You also have the right to keep residing in your home for as long as you want.
The home reversion plan, on the other hand, allows proprietors to receive a cash lump by selling a part of all of your home. Unlike the lifetime mortgage, this scheme offers equity to homeowners aged 60 and above. You also don’t pay any interests since you receive the cash in one lump sum and transfer your shares to the plan provider. So, when the life of the loan dies, that is when you pass on or move into long-term care, the plan provider will put up the house for sale. They’ll then take the sale proceeds of their share of ownership, and the remaining proceeds will go to your family.
Equity release also allows you to use the capital unlocked as you wish. So, if you have been trying to grace the world with your dark fiction novel or short stories, visit Greece to get acquainted with the Greek Mythology, help your niece pay for her art gallery’s lease or just enjoy some time in your retirement, then you should consider taking this plan. It also offers you the chance to pay off any outstanding mortgages, clear any impeding debts and enable you to buy out your spouse in the case of a divorce.
It’s also one of the most secure financial products since its governed by the Equity Release Council2 (ERC) and regulated by the Financial Conduct Authority3 (FCA). The ERC provides plan providers with stipulated rules that they must follow to ensure that the plans you get are safe and reliable. They also insist on taking equity release plans with the ‘No negative equity guarantee4‘, which safeguards you or your heirs from owing the equity release company more than the initial value of the estate.
You can make your dreams come true with equity release. If you haven’t taken it out yet, hurry and see your financial advisor today, for the best time in retirement!