The world of finance can become increasingly difficult to navigate, especially as a couple or individual grows older. With age often comes significant financial and family decisions, one of these decisions often revolves around the idea of taking part in an equity release scheme. There are several schemes available, all of which require careful thought and consideration in determining, which if any, is right for the specific case at hand. Home equity release allows a homeowner to earn income off of the equity that has already been invested in their home. This is often perfect for seniors who are looking for a larger monthly income or cashflow. Many seniors decide to take part in a home equity release scheme so that they can spend their retirement more comfortably, or so they can help their children in some way.
There are currently two main types of quity release schemes. These are home reversion plans and lifetime mortgages. With a home reversion plan, the homeowner sells part or all of their property. In return they receive a lump sum of money with which to live and they are allowed to stay in the property for the remainder of their lifetime without having to pay any rent. With a lifetime mortgage arrangement, the homeowner takes out a loan against the value of their property. They then can choose whether or not they want to make monthly payments on the interest incurred.
The best equity release schemes vary with each family, couple, or individual. Most seniors must consider several factors when deciding on the perfect scheme. One factor that is often considered is that of the well-being of their children, both presently and in the future. (more...)