Property Articles

An increasing number elderly people are considering to make use of the money locked up in their home to enjoy their retirement years through equity release schemes.

With the UK property boom over the last decade, most people have seen the value of their home increase significantly. The equity release plan is a way of people trying to make the best of this increase of their home.
Especially the retired people are keen on releasing some hard cash out of the rising value of their homes in order to increase their spending.

The equity release plan allows the home owner to release tax-free cash from their home in order to boost their finances in retirement.
There are several different schemes on the market but most of them have the same principal of giving the owner a loan on the value of their property.

There are two main equity release plans widely on offer:

• lifetime mortgages,
• home reversion plans.

The lifetime mortgage seems to be the more popular of the two plans.

The owner receives the loan as cash, as a lump sum or on a monthly basis, and continue living in their home.

The lender then recovers the loan either by selling the property after the owner’s death or when the owner sell the property - for example to move into a care home.

Whatever you do, please seek expert independent financial advice. The equity release schemes are often easy to get into but generally hard to get out of.