The Basics
Equity release schemes are one of the best ways that elderly people can release money to live a comfortable life. With the help of these schemes, they can release some amount of capital from their property. This cash can then be used as a supplement to their retirement income.
Through equity release schemes, elderly people can get a lump sum amount of cash or a steady income or a combination of both. As income tax is not charged on the equity release amount, homeowners will get the full sum agreed. They can use the money to carry out home improvements, go on a holiday or settle outstanding debts such as credit cards & loans.
Equity release schemes allow homeowners to release cash from their property without losing their property ownership. According to the equity release agreement, the borrowed money is paid back after the homeowner passes away or moves into long term care.
Post retirement, the income one receives usually decreases markedly. Moreover, coping with daily and monthly expenses becomes quite difficult. This is when equity release can be the best tool to support your retirement income.
What are the Best Equity Release Deals?
There are different equity release deals available from different providers so you must choose one that fits your needs. You should also read the terms and conditions of the agreement. If you find anything confusing, do not hesitate to take professional advice. With the knowledge and experience that professionals have, they will guide you through the process and determine the right scheme for you.
Depending on your requirements, there are different equity release deals available. If you are short of savings & then search for offers with free valuations. Look towards companies such as: –
- AVIVA – free valuation upto £1million
- Just Retirement – unlimited free valuation
- LV= – unlimited free valuation
- Partnership – unlimited free valuation
- more2life – unlimited free valuation
- Hodge Lifetime – discounted valuation fee of £99
As you can see there is much on offer & the deals don’t just stop there. A good equity release adviser will source the best equity release scheme whether its a lifetime mortgage or home reversion.
Further equity release deals your adviser should consider include additional assistance with set up costs. When considering an equity release plan don’t just concentrate on the lifetime mortgage interest rate. Interest rate affects the APR (annual percentage rate) but also does any costs borne on inception of the plan. These include the following: –
- Application Fee
- Solicitors Fees
- Adviser Fee
All the above can be negotiable & try to find an equity release adviser who can get the equity release schemes & provide you with best advice as to which is the overall best plan.
To help mitigate these costs some lenders will provide incentives such as a cashback which is usually paid by cheque shortly after the money is released. Application fees charged by lenders can also significantly affect the APR. These can vary from £0 upto £695. Quite a considerable savings indeed.
In summary, there are many avenues of cost cutting exercises with equity release mortgages. Take your time, do your research & always employ the services of an independent financial adviser with FSA registration.
Call 0800 678 5159 for your local equity release consultant.