Understanding Equity Release Lifetime Mortgages

Equity release is actually a term which gives financial solutions in UK for everyone who is of 55 years or more. It covers the whole financial sector with lifetime mortgages, home reversion plans and equity release schemes. It should be noted that both lifetime mortgages and equity release schemes are almost the same terms which are used interchangeably. Each one of them releases an amount of money for those homeowners who are the age of 55 or more.

The amount of money releases from the type of equity in your property based on the value of the property and the applicant who is of the youngest age. The releasing amount starts from 21% for those of the age of 55 and it increases 1% annually to the maximum limit of 56% till you are 90. Usually all equity releases work by giving a lump sum amount which can be spent according to your wish. You can do it for supplementing your ongoing pension, for you home improvements, state benefits, for going on a holiday or just to help your loved ones like you grandchildren or children.

Equity Release Lifetime Mortgage really helps in providing a solution for all those who are cash poor but asset’s wise rich. But these schemes are not for all people and it is highly recommended to obtain advice from one or more advisors in the market for equity release schemes.

There are both pros and cons attached with it. You can live in your home all through your life without any payments on monthly basis. When the last applicant dies, the whole debt is repaid. Among the many advantages of releasing the equity through the lifetime mortgage scheme is the hefty amount of money. The money you get from this mortgage plan is more as compared to the schemes of home income or interest only mortgage plans. If you get a fixed rate on the mortgage deal, you can easily count the budget and count your liabilities accurately. But sometimes the equity release affects the tested benefits. And when the interest increases, the amount automatically gets reduced which meant to be left for your beneficiaries.

The owners with residential property with the age of 55 years or more can easily apply for the lifetime mortgage scheme to get equity release. But when home reversion plans are concerned, the borrowers are not restricted to wait until they get to 65 years of age.


For information, help and independent financial advice on equity release lifetime mortgage call our specialist team of advisers or visit http://www.retirementsolutions.co.uk/equity-release/lifetime-mortgages