If you are looking into the possibility of releasing equity from your home, you will be aware that this is a big financial decision. Before you decide to act on your idea, it is always a good idea to get as much solid, grounded advice as possible. Living in the Bristol area you can always get the advice you need. Simply search for citizens’ advice in Bristol to help you get some answers.
How to Begin
To begin with, you will want to conduct a little research of your own into the policies and schemes available to you. Scour the internet for good financial comparison generators: these should allow you to compare a variety of schemes against each other so that it is easy to determine which is right for you.
Before you head out to secure citizens’ advice in Bristol, the final step in this plan, you will want to chat to consultants from a few different companies. Don’t make any solid decisions at this stage; simply ask these professionals any questions that you may have about the possibility of equity release.
Once you have asked around in this way, head to the citizens’ advice offices and present them with your findings. These volunteers will be able to give you informed independent advice regarding your ideas.
What to Uncover in your Research
Already you are beginning to conduct research on lifetime mortgages and equity release or you would not be reading this article. Prior to gaining advice from a qualified mortgage broker it is often helpful to know a little about the products you will be discussing. Furthermore, it can be handy to understand if these products are actually right for you. The following are concepts to learn:
• Lifetime mortgage
• Home reversion
• Maximum lump sum amount
• Release of equity
Lifetime Mortgages are Equity Releases
When you release equity from your home you have obtain an equity release product. Yet, there are retiree and mainstream releases of equity which differ in how they work. If you want to release equity and are under the age of 55, you need to search for an equity release in a mainstream mortgage like a secured loan with a set repayment schedule over a fixed term period.
Lifetime mortgages are not like this. It is an equity release based on your lifetime. How old you are is going to depend on how much you can release from your home’s value. The older you are the more you can obtain because your life expectancy is considered shorter than a younger person. This is the reason there is an age qualification that begins at 55.
Under a lifetime mortgage you do not make monthly payments. Instead the principle balance is paid upon your death along with any interest that compounds over your lifetime. There is an exception in the interest only lifetime mortgage that allows payments to be made each month of interest not the principle.
This is an equity release without a loan. It is again for retirees, but you must be at least 65 years of age. You sell a part of the home. You could also sell the entire home. In return you have a lifetime tenancy agreement. This agreement allows you to live rent free until death. The difference is a loss of full ownership, the reward is no repayment in the end.
Maximum Lump Sum Amount
With equity releases for over 55s there is a maximum amount you can obtain based on your home’s value. This maximum amount does not have to be taken, you can take a smaller amount. The point of the maximum lump sum amount is to show you how much is possible to obtain allowing you to decide if the equity release product will work for you. If the sum is significantly less than you need you may need to look for alternatives like downsizing as a way to release equity.
The calculated lump sum you can derive from Internet calculators is an estimate of potential. It helps you get the discussion started when you seek advice. It is not 100% the amount you may receive. Just use it as a guide.
In short, equity release is no small financial step. If you are keen to borrow money against your home, or indeed to sell your property in the interest of generating regular income, you will need to do plenty of research and talk to a variety of people in the know such as securing citizens’ advice in Bristol.