subject: Equity Release Schemes, Uk Are Gaining In Popularity [print this page] I had never heard about equity release plans and equity release schemes, UK until a financial advisor came to speak to my father a few years ago and persuaded him to look in to the possibility of joining an equity release scheme. My father is a cautious man, especially when it comes to financial matters and said that he would think about it, but refused to be pushed in to buying an equity release plan then and there.
In financial terms, equity is the value of an ownership interest in property, or home equity is also the difference between the market value and unpaid mortgage balance on a home. Equity release, UK, is a means of retaining use of your house or other object which has capital value, while also obtaining a lump sum or a steady stream of income, using the value of the house. Equity release is particularly useful for elderly persons who do not intend or are not able to leave a large estate for their heirs when they die.
In the UK the most popular plan is a lifetime mortgage - where the homeowner retains ownership of the property but the property is charged with the repayment of a loan or mortgage, which accrues rolled up interest over the period of the homeowner's lifetime. To help customers decide whether equity release is right for them, a number of companies provide a free equity release calculator to show a rough estimate of the amount of equity that could be released. The other type of plan is a reversion plan - where the homeowners sells all or part of the property to the equity release provider in return for a right to remain there rent free.
Over the past decade returns on property have dwarfed those to be had from stock market investments and savings and some people have seen the value of their homes more than double since the mid 1990s. It is no surprise, therefore, that equity release schemes have gained so much popularity. Retired people are particularly attracted to using the rising value of their homes to boost their weekly income.
These equity release schemes differ in some respects but essentially most of them work by giving you a loan on the value of your property. The deal is that you receive the loan as cash, usually on a monthly basis, but sometimes as a lump sum, and continue to live in your home. Then the company that loans you the money will recover it either by selling your property after your death or if you sell your property - for example to move into a care home.
If you are considering an equity release plan, you will need to get some professional guidance and then the best thing to do is to go online and do as much research as you can before you commit yourself and your property. There are many questions which need to be asked and you need to be confident.
