Equity release the term itself bears the definition and role of the same. The release equity refers to the scheme that gives the aged and retired individual an additional source of income in lieu of the property that the retired individual has mortgaged. Though the benefits drawn from the scheme irrespective of the types are more or less the same, yet there are slight variations as per the specifications of the respective genre. The scheme has indeed proved to be very handy and timely as far as the post retirement financial requirements are concerned.
The different types of equity release are as follows:
Lifetime Mortgage: In this type of release equity the retired individual mortgages the property, in lieu of which the money is received. The individual can take up the sum for use. He or she can use it again avail for this option if required however in that case the individual has to apply again.
Drawdown Equity Release Plans: The concept is similar to that of the lifetime mortgage however with a greater flexibility, as in the retired individual in this scheme can avail for the option again and again without going through the hassle of applying every time.
Interest Only Mortgage: This option allows the retired individual to get the interest as the income. This way only the capital needs to be paid back after the demise of the retired individual.
Home Reversion Plans: In this case the retired individual sells off a part of the property and in return gets the required amount. This way the ownership of the rest of the property is retained by the retired individual.
The equity release option thereby offers numerous flexible alternatives suiting the respective needs of the separate retired individuals making it a retirement friendly option for the old ones.
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