If I say that your house is your pension plan? Assume you purchased a house and then paid the mortgage instalments throughout your working life. This can be compared with investing in any pension plan or investment plan. If you have paid off the mortgage and there is no loan against your house, you can get good amount of cash in hand by releasing the equity of your house. House equity release is quite popular among the senior citizens.
Equity release plans are usually made for elderly people who have retired and have positive equity on their home. By releasing equity they can get a lump sum amount in hand; the money can be used for several purposes as required. House equity release is like cashing the value of the property; you liquidate the worth of your house through equity release.
Retirement is a turning point in life; so many things change as you retire from work. You also have to do lots of adjustments; your income will not be like before and you have to make suitable changes in your lifestyle so that you can keep going with reduced earning. If you do not have a pension plan in place, things may become really frustrating.
If this is your case, house equity release can be of immense help. There are many equity release plans for you to choose from. These plans are specifically designed to cater to the financial requirements of retired people. By selecting the right home equity release plan you can secure a financially healthy retired life.
When you release equity of your home you do not need to leave the house. The lender lends you money based on the market price of the property; they will not evict you from your house to get back the fund. Then what is there interest? Why they are offering money if they do not take possession of the house?
They definitely have a proper revenue generation model in mind. By offering money against the equity of a property, the lender gets the ownership of the property when the borrower dies. According to most of the house equity release plans when the borrower or the spouse of the borrower dies, whoever lives longer, the ownership of the house is transferred to the lender. This is the reason why lenders would offer you such a lump sum amount against the equity of your home.
Equity release is a useful way to secure financial safety after retirement. In some of the home equity release plans, the lender pays a lump sum amount – this is a one-time payment that the borrower receives. Some of the plans allow the borrowers to get a monthly payment from the lender. And there are some plans which are mixed of both. Based on your need, you can choose the right plan.
While releasing equity of your home, make sure you have understood the terms and agreements of the services. Ask questions until you understand the things. Take a wise decision and be an informed consumer.
