Equity release is a grey area for many people and there are many positives and negatives that many people are not aware of. This is the reason everyone needs sound financial advice on equity release. It will no doubt help you to get the right financial help for yourself and ensure that you do not get yourself into a lot of financial hardships at the same time. It is crucial that you get impartial equity release advice for the best of your financial future.
As part of independent impartial advice, financial information on the client will be gathered by the adviser. He or she will want to know how old you are and what your state of health is. He will want to know the amount of equity you have amassed on your property, as this will determine the amount that you can borrow. With good sound equity release advice, you will be able to protect your inheritance, since it is always best to take just what you need rather than the maximum lump sum amount. This is because you will not get into problems with the payment of interest.
Equity release plans enable a home owner to generate tax free income by using up the equity in a home. You will not have monthly repayments to make and you will have the freedom to spend the money however you want and stay in your home as long as you want. Equity release advice may help you purchase another home with the money released from the equity of the home or achieve other financial milestones.
There are so many people who are turning to equity release as they approach their retirement. Considering the increase in needs and the economic climate, it may or may not be a good idea to release equity on your home to fund some personal projects. Overall, your move should be well advised, so that you do not run into financial problems in your twilight years.
It is important that you understand that releasing the equity in your home is a financial commitment that could turn into a financial burden if you are not well planned and advised. You should keep in mind some factors such as the amount of debt you are in among others. A specialist will explain to you the reduction of the value of your estate that comes with the equity release as well.
To begin with a little equity release advice, you need to find someone you can trust. It takes knowing a little about the options you have available to you, so that you can listen to the advice and ask questions.
Lifetime mortgages are a loan on your current property. You can take out this loan if you still have another mortgage on the property; however, advisers will advise against this. To enter into a new mortgage that you do not make payments on you should have a home free of any mortgage or loan. In this way your family can sell the house at your death or when you move on to a care facility in order to pay off the loan. They may also have the option of paying the loan without selling depending on the finances left behind.
There are four types of lifetime mortgages:
• Roll-up
• Drawdown
• Enhanced
• Interest-Only
You also have a separate choice in home reversion. This option is about selling a part or your entire property with the right to remain in the house until you die or decide to move out. At the point you decide to leave, your home is sold to the home reversion provider. They sell the entire home and then give any remaining balance to your beneficiaries ensuring your family is taken care of.
With at least five choices mentioned here and more products entering the market in equity release, it is imperative that you seek equity release advice. Advisers must follow the Safe Home Income Plans or SHIP code. The FCA, the new financial authority, regulates the equity release market among other financial markets. The SHIP code states what can be done in an equity release, which helps guide advisers who guide you.
Finding equity release advice through a qualified provider is simple enough when you look for the SHIP symbol. Be prepared when you set up a meeting to ensure that you remember all the questions you have on equity release options to ensure they are answered during the first consultation.
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