Equity Release

Equity Release Explained

You just retired and are now looking for a way to relax and enjoy life in the golden years. Since your pension pot is entirely dedicated to making those home improvements you need, you’re searching for the best financial plan to help make your world tour dream come true. Well, with the equity release explained guide, you can learn about the most lucrative 21st Century financial product, one that will turn your life around. That said, here’s a comprehensive guide to equity release1 products.

Financing Your Dream Vacation with Equity Release

Owning a home in the current economy makes you one of the luckiest retirees on earth. Why? Well, with the invention of the most impressive financial products, equity release plans, you can get all the capital you need to make your dreams come true.

The financial scheme features various plans that allow you to unlock the capital either by taking out a loan secured against your property or by selling a percentage of your entire home. You can either take the lifetime mortgage2 plan or the home reversion scheme. With either of the equity release plans, you get to retain the right to reside in your estate until you pass away or move out permanently.

Depending on the plan you choose, you can release the money as a tax-free lump sum or in a series of dogmata, and it’s up to you how you spend it. Therefore, you can get to tour Cape Town, Australia, Seychelles, Kenya, the Maldives, and even Malaysia. You can also add some cash to your pension3 savings to boost your home improvements budget, help your family pay the mortgage or even make any investments you need.

For you to take out the plan, there are certain specified conditions you need to meet. These specifications include, but aren’t limited to:

  • You (or if you’re a couple and are borrowing jointly) have to be at least 55 years old for the lifetime mortgage and 60 years old for the home reversion scheme.
  • You should also possess property within the remits of the UK, and the residence should be your primary residence.
  • Your property must be in pristine condition and over an absolute value, and depending on your plan provider; there might be limitations on the type of estate acknowledged.

If at the time of taking the mortgage loan you have an existing mortgage or a secured loan on your home you can still take the mortgage plan, but it’ll be dependent to the value of your residence and the amount outstanding on the present mortgage. You’ll also have to pay off any unsettled mortgages or loans secured against your home first before spending it on your vacation.

The schemes are also governed by the Equity Release Council4 and regulated by the Financial Conduct Authority. The ERC has specific codes and guidelines that protect you from being exploited by unscrupulous lenders. The Council advises you to take equity release plans with the no negative equity guarantee scheme. The guarantee ensures that all the equity release schemes adhere to the SHIP’s regulations. It protects you from having the amount you owe driven up by estate price changes. So, your beneficiaries can’t ever incur any debt over the property market value once you pass away.

So, make a smart decision today and get your best equity release plan and enjoy every moment of your golden age sipping wine along the beaches of the Maldives or the mountains of the Himalayas.