Can You Pay Back An Equity Release Mortgage

Many over 55`s are looking to release funds from there property but are worried that interest will consume the remaining equity left in the property, First Choice Finance have access to a number of lifetime mortgages with full or partial repayment options.

What Exactly is Equity Release?

Equity release is a popular finance option amongst the financially savvy over 55 year old people today offered by many banks, insurance companies and building societies, moreover, the current crop of special equity release providers are developing more innovative equity release schemes to better serve their potential consumers.

But what exactly do equity release schemes do? What are the advantages and disadvantages of equity release products, and why are they becoming so popular today? Let us look at some equity release basics now to understand what is making them increasingly more attractive to the general public of the UK

Firstly, one needs to make an initial assessment of their property & ascertain its intrinsic value. This figure is more commonly known as the net equity of your property. Net equity is calculated by deducting any loan or mortgage from the total market value of the house. This figure is then the amount that is available to be withdrawn from the home via equity release to enhance your retirement.

Therefore, the equity release basics are pretty simple in concept. Value the property, take the age of the youngest applicant & this will determine how much of the equity can be released. Now there are different ways this can taken & this is where professional advice is essential so you make the right decision.

One common problem during retirement can be that you own a home to live in, but you don`t have enough income to spend on a day to day basis. While the property is of great value, you can`t really use it to fund your everyday life, unless of course you sell the house, in which case you have liquidity but no home.

Equity release is a financial mortgage scheme for people over the age of 55, that allows you to make best of both the worlds by using this frozen equity in the house, but does not require you to sell the property. The money that is borrowed against the home is repaid after the house is sold, or upon eventual death or moving into long term care.

As opposed to a loan, equity release schemes ensure that the house will not be repossessed as long as you`re alive and residing in the property. For many, equity release provides the ideal solution as it allows them to unlock the value of their house perhaps to add to their monthly income or to use as a lump sum.

Over 55s Equity Release Schemes

There are financial products that allow you to release equity from your home and use the cash without having to sell the home or move out of it. It provides an easy option for people over 55 to supplement their income, take care of mortgage or use a lump sum for any other purpose.

An increasing number of over 55s are opting for equity release schemes. In the current economic climate where bills run high, life is becoming more expensive and debts in the average household are on the rise, equity release may seem like the perfect option to many.

However, many financial critics are worried about how early people are opting for equity release schemes. For the more elderly, equity release can pose less risk, as the interest that is built up does not devalue their legacy as much as it would for younger home owners.

Also, older people tend to have older inheritors who are likely to be more financially stable than children of younger home owners. In this light, it may be wise for younger home owners not to look at equity release not as a quick and easy solution to get their hands on liquidity.

Equity release is a good option for many, especially for older pensioners, but it may not be the correct choice for everyone. So before setting up an equity release scheme, make sure you fully understand all the repercussions.

Equity Release Lifetime Mortgages This is a lifetime mortgage. To understand the features & risks ask for a personalised illustration. Our fee is £985 which is only payable upon completion. THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME, OR YOU WANT YOUR FAMILY TO INHERIT IT. IF YOU ARE IN ANY DOUBT, SEEK INDEPENDENT ADVICE.

Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk

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