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Raising Money in Retirement

Equity release is one of the most recent and common solutions offered to retirees who own a property to allow them to raise money in retirement. The fact is that retired individuals do not have many different income sources and the fact that they are retired makes it difficult for them to raise money. The new equity release plans such as lifetime mortgages and home reversion plans make it possible for retirees with a property to release equity from that property.

The fact is that a lot of money goes into purchasing a property. Eventually, that money is tied up in the property. On the other hand, the home owner does not have to worry about finding a place to stay during his retirement. While he may not have several different income sources and may only have sufficient money to meet his daily expenses, he and his partner have a property that belongs to them in which they can safely stay for the rest of their lives without having to worry about rent.

The greatest advantage of equity release plans is that they do not take away the home security from home owners. Home owners who sign up for an equity release plan is allowed to safely stay in their home for the rest of their lives. Equity release plans offer them the option to gain an additional source of income to meet more than just their expenses without having to give up their home security.

A lifetime mortgage is one of the most common equity release plans. It allows home owners to obtain a mortgage from an equity release provider. This mortgage does not have a fixed term. It lasts for the remaining lifetime of the borrower. During his lifetime, the borrower does not have to make any repayments. He will receive sufficient funds to finance all of his wants and needs for the rest of his life. However, when he dies, his property will be sold to repay the mortgage.

A home reversion plan is a bit different. Instead of obtaining a loan secured against his property, the home owner sells some or all of his property to the equity release provider. Although he has sold some or all of his property, he and his partner can still safely live in their home for the rest of their lives. Once they die, the property goes to the equity release provider.