This cash can then be used to supplement your income or savings. Depending on the option you choose this money could be released in various ways such as a payment of one lump sum or in several smaller amounts.
There are two types of equity release options;
The first is taking out a Lifetime Mortgage, this effectively allows you to borrow against the value of your home. Here the repayments will not be due during the lifetime of the loan, but will accumulate and will be repayable when the borrower dies or goes into long term care.
The second option is a home reversion plan, this requires the sale of either all or part of your property to release the funds, however you as the borrower retain the right to continue to remain at your property rent free until your death.
The advantages of equity release are that you need not downsize nor sell your home in order to benefit from the cash tied up within your property.
However, equity release must only be an option once you fully understand the implication too namely in effect you are starting a mortgage in reverse which will diminish the value of your home.
It is important to consider all the factors before embarking on an equity release product, why not give our friendly expert property team a call for an initial free chat on 01202 802807.
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