Equity Release Schemes Are Still A Great Option

Need money in a hurry? If you are a fortunate homeowner who has some equity built up in your home, you may want to consult an experienced financial advisor in the field of equity release products. These products fall into two main categories although they may be known by different names dependent on the country or market in which you are residing: Lifetime mortgages and Home Reversion Plans.

In the UK, the equity release market offers two basic plans: the lifetime mortgage in which the ‘owner’ retains rights to the property overtime, but is charged a loan or mortgage. This is, by far, the most popular form of equity release. The equity is then calculated based on the value of the ‘capital’ invested in the property. Market values also impact on the home value which may show depreciation or appreciation depending home purchases.

Once upon a time, back in 2007 for example, advertised equity release schemes allowed one to buy a new car or simply pay bills without a financial advisor. Equity release products offered many homeowners quick cash to buy any high-demand item. Today, this is not the case. With the economic downturn which peaked in 2009, it is essential that equity releasers heed the advice of financial advisors and consult experienced analysts before making the final decision on accessing the equity in their home.

Retain Your Rights
This article highlights a form of equity release called the Reversion Plan. One of the most lucrative ways of obtaining equity and retaining your home is through a Home Reversion Plan. Are you in poor health, over the age of 65 or have a terminal illness? The Home Reversion Plan the best way that you can live rent-free while earning a monthly income from your home. The older or more sickly you are, the higher the equity that you could receive from a Home Reversion Plan.

Here is How It Works
Reputable equity release schemes offer Home Reversion Plans that will buy your home for 20-60 percent of its value allowing you to continue to live in it until death or divorce separates you from your home. During that time, you will be responsible for the upkeep and any payments or mortgages associated with the home. Since this is not a loan, there will be no taxes to pay or interest. Laws are in place to protect your right to live in the home and the purchaser cannot sell your property until you release it. Oftentimes, the purchasing company has to wait for death of all parties before he can sell the house for a profit.

Benefits
Under the agreement you will receive payments based on your choice – monthly or lump sum. Care should be taken to avoid spending the money frivolously as disposable income buying unnecessary items. It is advisable that the money be used instead to enhance general living conditions and meet unexpected but necessary expenses. However, money from the release of equity can be used for any purpose. Another benefit of the Home Reversion Plan is there is a choice to sell either a part of the home or all of it. Again, this is based on your health and longevity, the availability of beneficiaries or dependents or need for future savings. You may want to retain a portion of your home for sale at a later date to secure future income.

Pension
Retirement does not have to be cashless because a homeowner may start benefiting from properly securing a Home Reversion sale. A hard earned investment in your home can be enjoyed while you are young enough to spend the money.

Author Bio: Simon Kings offers a variety of financial services experience and is considered an pro on all aspects of equity release. Please visit http://www.agequityrelease.com for more information on equity release plans.

Category: Finances
Keywords: financial services,business,equity release,finance,retirement