Older homeowners looking at ways to release some money from the value of their home may have examined a wide range of types of equity release schemes in order to do so.
One of the most appealing of the products may prove to be lifetime mortgages, due to the fact they are a straightforward way to unlock money from a property, reports Citywire.
According to the news provider, there are a wide range of advantages to these types of schemes, as the money paid out can be taken in either a lump sum or as regular income.
This means they can be useful either for those who want to secure some regular money for their retirement, or for individuals in need of money quickly, which could be used to help out family members in an emergency, pay for a wedding or a house deposit, or to go on a holiday.
"The loan you receive depends on your age, health and value of your property. You can pay the interest on the loan back in two different ways," noted Citywire, which explained the first method is via roll-up, where the interest increases over time and can be either repaid with the loan on death, when the property is sold, or when the homeowner finalises a move into long-term care.
Finally, the interest-only plan "requires the beneficiary of the loan to repay the interest on the loan monthly", with the repayment of the borrowed amount completed on sale of the property, death or if the householder enters a care home.
Options for couples
It was added by the news provider that a couple could take out this type of lifetime mortgage "and the loan and the responsibility for the repayments passed to the surviving person on death of the partner."
Richard Espley, head of equity release at Goldsmith Williams Solicitors, recently told IFA Online it is important those considering equity release plans ensure they take specialist legal advice before they come to a final decision.
Posted by Christian O'Leary