May 10, 2015 | By Clicksco |
More from Clicksco
What is equity release? How does it work? Who qualifies for Equity Release? Equity release schemes enable homeowners over a certain age (typically 55 or 60) to generate extra income rom the value o their property, without the inconvenience o selling that property and moving elsewhere. Your house equity is the dierence between the market value o your home and any outstanding mortgage debt. It is this extra monetary value that could be released to you, either as a lump sum or in the orm o a regular income. To be eligible or an equity release scheme, you have to meet a number o qualiying conditions. These qualiying criteria are discussed in depth later on in this guide. By participating in an equity release scheme, you can take advantage o the equity that has built up in your property over the years. The amount o money you can borrow depends on a number o actors: your age at the time o taking out the scheme; your circumstances; and, o course, the monetary value o your property. The cost o releasing equity in your property is very much dependent upon the type o scheme you opt or. The two primary options as regards equity release are either a lietime mortgage, where your home is used as collateral; or a reversion scheme, which involves selling a percentage stake in your property but continue to live in it. To qualiy or an equity release scheme, you have to be aged at least 55, although the majority o schemes will set 60 as a minimum age requirement. You should also own your own property and must not have any dependants living with you. Additionally, you should have no mortgage let to pay or at least only have a small amount let outstanding. Your home needs to be in a good standard o repair and o a specifed minimum value. Qualiying property values vary between scheme providers. Equity release is one of the options you can consider as you approach retirement. Not everybody qualifies and it is not suitable for everyone – but, for many people, it offers access to hard-earned capital when they have more time to enjoy it.