Equity release schemes appear to be a good way for those at retirement age who own their homes to get some of their homes financial worth as cash to spend when they need it most. Some retirees find that their pension is just not enough to fulfill their cash requirements and they have a house that is worth a considerable amount.
Cost of living increases could mean that a pension will just not stretch to the expected lifestyle of a retired person. The opportunity to free up some cash that is tied up in the property could mean a better quality of retired life, being able to keep the property and avoiding having to get bank loans which is not always easy in retirement age.
With the availability of equity release schemes a retired person now has the choice of staying in their home while still taking advantage of the cash they would have gotten if they had sold up and moved to somewhere smaller. This is a good option for those who have emotionally attachments to their homes or just need some money to bridge a financial gap.
The three main types available are called Lifetime Roll up Mortgages, Home Income Plans and the Home Revision Plan. The option known as the lifetime roll up mortgage is basically a secured loan. This can make an immediate cash sum available for use or pay out in monthly installments to suit a person's needs.
Home income plans means having to take out a lifetime mortgage on a certain percentage of the property with a provider. They will then give back what is called and annuity. This is where a monthly payment is made based on a person's age and sex. An annuity is generally seen as a safe way to receive a monthly income.
The final option is the home revision plan. With this option the retired homeowner can sell some of their home to a provider who will then give either a one of cash payment or regular monthly payments for the lifetime. At the same time the homeowner will still have all their rights to remain in their home.
While it is clear that the equity release schemes do help to ensure that a pensioner can retirement as best as they can, caution should be taken when filling forms and signing contracts. Note that no plan should take away the homeowners right to live in their house.
Cost of living increases could mean that a pension will just not stretch to the expected lifestyle of a retired person. The opportunity to free up some cash that is tied up in the property could mean a better quality of retired life, being able to keep the property and avoiding having to get bank loans which is not always easy in retirement age.
With the availability of equity release schemes a retired person now has the choice of staying in their home while still taking advantage of the cash they would have gotten if they had sold up and moved to somewhere smaller. This is a good option for those who have emotionally attachments to their homes or just need some money to bridge a financial gap.
The three main types available are called Lifetime Roll up Mortgages, Home Income Plans and the Home Revision Plan. The option known as the lifetime roll up mortgage is basically a secured loan. This can make an immediate cash sum available for use or pay out in monthly installments to suit a person's needs.
Home income plans means having to take out a lifetime mortgage on a certain percentage of the property with a provider. They will then give back what is called and annuity. This is where a monthly payment is made based on a person's age and sex. An annuity is generally seen as a safe way to receive a monthly income.
The final option is the home revision plan. With this option the retired homeowner can sell some of their home to a provider who will then give either a one of cash payment or regular monthly payments for the lifetime. At the same time the homeowner will still have all their rights to remain in their home.
While it is clear that the equity release schemes do help to ensure that a pensioner can retirement as best as they can, caution should be taken when filling forms and signing contracts. Note that no plan should take away the homeowners right to live in their house.
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Firstly, SHIP lenders guarantee that the homeowner will never end up owing more than the value of their home. Some people were not too keen on this because of the fear of loosing the home. There are three guarantees from all SHIP members. equity release schemes | equity release. Check here for free reprint license: Introduction To Equity Release Schemes.
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