The Lesser Spotted First Time Buyer
Once there were many now they are rare - what has happened to all the first time buyers?
Protecting your money - who paid what?
If you're buying a property with a partner, how can you make sure the money you invest is protected?
Things to consider when remortgaging
Reviewing your mortgage could save you money. Isn't that worth the effort?
Should I pay off my mortgage early?
Things to consider if you find yourself with some spare cash.
Please release me....Equity release
You've seen the ads, but what is equity release and its consequences?
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Please release me....Equity release
If your house is worth more than your outstanding mortgage, then you are one of the lucky few who have equity in your property.
An equity release scheme is a way of getting cash from your home without having to sell it. You usually have to be over 50 years old to qualify. You can continue living in your home and will stiill be responsible for the upkeep and maintenance of your home. You can chose between cash, a regular income or a mixture of both.
Two types
There are two main types of equity release schemes - home reversions and lifetime mortgages.
A home reversion policy is where you sell part or your entire home to a reversion company or individual. You will no longer own the home but can continue to live there as a tenant. Your home will be sold if you were to move out or die.
A lifetime mortgage is a loan (mortgage) that is secured on your home. You continue to own your home however you do have to pay back the mortgage on it. The mortgage is repaid when you sell your home.
There are various different types of lifetime mortgages and more information can be found on FSA website
Show me the money
Depending on the policy you can take the proceeds as cash or an income or a combination of both. You could receive a regular income from the provider or as and when you needed it. Or you could use the cash to buy an annuity or other type of investment that provides an income. You can even take cash at the beginning and then receive an income in the future.
Are you sure?
Equity release schemes are not for everyone. It is important that you fully understand all the details of the policy and the possible implications. Your State benefits may be affected for example, as may your beneficiaries' future inheritance. You would also need to consider any future property decisions you might make and whether or not you feel comfortable with owing money to an equity release company.
There are also the costs to take into account such as arrangement and valuation fees, legal and insurance costs and early repayment charges.
The alternatives
If an equitable release scheme is not right for you then you could consider some alternatives:
• Downsizing your property
• Utilising savings or investments
• Tracking down lost pension schemes
• Checking your State benefit entitlement
• Contacting your local authority or Citizen Advice Bureau to check if you can claim any money to help with home repairs or improvements.
Opting for an equity release scheme is a major investment decision, so don't rush into it. Discuss the products available and implications with an independent financial adviser and make sure you understand the policy details and implications. Make sure you ask questions as it could be too late ten years down the line.
Discuss the matter with your family as it may not only be your future that is affected by the decision you make.
Source: Time For Money