Equity release products are good for senior citizens. This can be a strategy that maybe the answer if you wish to remain in your home during your golden years. Many seniors are finding a situation where they are living on a fixed income and are having difficulty paying their to pay the bills during your golden years is no way for anyone to live.
These products help seniors convert their home equity into cash allowing them to remain in their homes either move out permanently, sell their home or pass away. The basic requirements are homeowners must years of age or older, there is no income or credit check and no monthly payments giving seniors financial freedom.
Home Reversion Product:
The homeowner can take out the exact amount of the home’s value and the homeowner can stay in the house until the home is sold. Under this equity release product you cannot leave the property to your heirs because when the property is sold a portion of the sale’s proceeds are to the reversion company.
Lifetime Mortgage Product:
The homeowner will take out a loan and the principle and interest are not paid back, instead the interest accrues and is added back into the loan. is paid when the home is sold. If there is money left over from the proceeds it will go to the beneficiaries. If not, the beneficiaries will have to repay anything over and above the value of the home from the estate. To prevent this from happening, most lifetime mortgages have a no-negative-equity promises that you or your beneficiaries won’t have to pay back more than the value of are several types of plans available i.e. a roll-up mortgage, a fixed repayment lifetime mortgage, an interest-only mortgage, and a home income plan.
Shared Appreciation Arrangement Product:
This lets the homeowner sell a percentage of the lender. The homeowner agrees to give up a portion of the homes “future” appreciation value while receiving a lump sum of the “current” value of the home. This will give the reversion company a share in your homes value.
These are the several types of equity release products available. Make sure you a financial advisor before making any financial decision.
