Equity releases are the new way to generate a great amount of income with few drawbacks. Mostly reserved for senior citizens or for those who are terminal, and equity release allows the person opting for the release to enjoy a very large initial lump sum of money or periodic payments of said sums.
The way an equity release works is by promising a property to a lender, in exchange for a lump sum of money or periodical payments. The good news here is that the borrower is able to live on the property, and in some cases retain full rights to the property, until death. Method of payment is usually up to the lender, who may put the value of the home in interest-bearing accounts or even allow an advance in exchange for ownership rights in the future.
The first benefit of an equity release is that it reduces the inheritance tax that one's descendants would otherwise have to pay. Less value in inheritance means less tax, so there is less to worry about as a result. Often times the lump sum given to the borrower is also passed down to descendants, who are more than happy to use the funds for funeral costs or other related fees. Different terms and benefits are available with different lenders.
Before obtaining an equity release, family members should congregate to see if this is right for them. Family members will receive much less inheritance on average as a result of an equity release, which may put strain on family finances. This could also impact any charities that were set to receive money as a result of a will put into law. Usually there are ways around each negative, so careful planning should be done before blindly applying for an equity release.
Once one decided to go for an equity release, there comes the problem of obtaining the right flavor. The most common is the lifetime mortgage, which allows borrowers to keep their house and still enjoy a large sum of money in return. Upon death, the borrower then sells the property to make up for the capital given to the lender. This is most popular for the sole reason it allows the home owner to retain ownership rights.
Other flavors of equity releases may include the home reversion, in which up to 100% of the property is sold to a third party. In this case, the borrower can still live in the home but has sold rights to another person or business. In return, the borrower receives regular income or a large lump sum in compensation for the exchange in ownership rights.
In Conclusion
Equity releases are great ways to enjoy the finer days in life. To see if you apply for an equity release, consider visiting several online and local lenders for more information. There are many different packages and plans to opt for, even if one isn't elderly or ill in some shape or form. - 16036
The way an equity release works is by promising a property to a lender, in exchange for a lump sum of money or periodical payments. The good news here is that the borrower is able to live on the property, and in some cases retain full rights to the property, until death. Method of payment is usually up to the lender, who may put the value of the home in interest-bearing accounts or even allow an advance in exchange for ownership rights in the future.
The first benefit of an equity release is that it reduces the inheritance tax that one's descendants would otherwise have to pay. Less value in inheritance means less tax, so there is less to worry about as a result. Often times the lump sum given to the borrower is also passed down to descendants, who are more than happy to use the funds for funeral costs or other related fees. Different terms and benefits are available with different lenders.
Before obtaining an equity release, family members should congregate to see if this is right for them. Family members will receive much less inheritance on average as a result of an equity release, which may put strain on family finances. This could also impact any charities that were set to receive money as a result of a will put into law. Usually there are ways around each negative, so careful planning should be done before blindly applying for an equity release.
Once one decided to go for an equity release, there comes the problem of obtaining the right flavor. The most common is the lifetime mortgage, which allows borrowers to keep their house and still enjoy a large sum of money in return. Upon death, the borrower then sells the property to make up for the capital given to the lender. This is most popular for the sole reason it allows the home owner to retain ownership rights.
Other flavors of equity releases may include the home reversion, in which up to 100% of the property is sold to a third party. In this case, the borrower can still live in the home but has sold rights to another person or business. In return, the borrower receives regular income or a large lump sum in compensation for the exchange in ownership rights.
In Conclusion
Equity releases are great ways to enjoy the finer days in life. To see if you apply for an equity release, consider visiting several online and local lenders for more information. There are many different packages and plans to opt for, even if one isn't elderly or ill in some shape or form. - 16036
