Looking Into Home Equity Release Schemes

Home equity release schemes allow you to sell your house and still live in it

. You also may receive a steady source of income. There are several ways that you can do this, and here are a few to look at.

Taking Out a Lifetime Mortgage

You may wish to look into the option of a lifetime mortgage. It is essentially, mortgage money that you do not have to repay, and you live in the house for the rest of your life. Upon your death, the house is sold and the mortgage is then satisfied. This may also happen if you enter into an assisted care facility. Interest is accrued on the loan and added to the total loan payoff amount.

There are some reasons that some people may not choose lifetime mortgages. First, you must own the property without any kind of liens or loans. If this is not the case, you might need to look into refinancing or second mortgage options.

When you receive your money, you will need to take care of home upkeep as before. If you need a new furnace or hot water heater, you will be responsible for those repairs. You will need to do this as long as you live there.

Equity release schemes

When you get an equity release scheme, it works just the opposite as a traditional mortgage. Traditional mortgages allow people to borrow money and use the property as the collateral. With equity release schemes, you essentially sell your property to someone and they make the payments to you. However, they do not take possession of the property until your death. You live in the house the entire time, and it gives you monthly income for life.

Not everyone may wish to take out a equity release schemes. In the future, you may decide to sell your house for a lump sum. If you have a equity release scheme, you cannot do so. As with lifetime mortgages, you will still be responsible for upkeep and property repairs.

Interest Only Mortgages

An interest only mortgage can give you lower monthly payments. In return for no principle payments, you assign the property to the lender upon your death. The house is then sold, and the loan principle is paid.

There are a few disadvantages to interest only mortgages. Your payments may not be very low for the first few years. Mortgage interest is highest in the early years of the loan, and that can make the payments higher. Also, the lender may be able to take possession of your house upon your death.

by: Harris

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