If you’re looking for Equity Release Southampton schemes, then you have come to the right place. This article will guide you in making the correct equity release decisions if you are staying in Southampton.
Before we start, make sure that you are clear with the term.
What is equity release?
It is a financial arrangement which enables you to release equity from your own home while continuing to live there. You can either choose to take the money in small amounts or as a lump sum.
Are You qualified for Southampton Equity Release Schemes?
There are three main conditions to be fulfilled here.
• You should be over the age of 55 years.
• You should own your residence.
• Your home should be worth at least £ 75000.
If you can tick all the above options, you normally qualify for Equity Release.
Why should You use Equity Release?
Now that you’ve met the criteria, you can easily avail Equity Release Schemes. There may be various reasons why you use to avail Equity release. These are:
• Improving your home
• Clearing mortgages and debts
• Having costs for medical care
• Gifting something to your children
The Basics of Equity Release
You can utilize the equity gathered by your property to collect cash. It is useful for older citizens who do not have sufficient sources of income. There are two types of basic modes of equity release you can adopt.
It is the most demanded form of equity release where you can earn an income or consider a lump sum return by taking out a loan on your property. You can also combine both while having the ownership of your property.
Generally, you do not have to pay any monthly repayment, and the debt is paid back when you expire or admitted into long-term medical care. The interest, though, keeps accumulating in the absence of monthly repayments and the owed amount increases considerably due to this compounding impact.
Home Reversion Plans
In this scheme, you can sell off the whole or part of your home to a home reversion institution in exchange for a lump sum of money or a regular income. You have the right to live in your property till it is sold off. You can get back 20% to 60% of the market value of your property under ownership.
Do note that while the amount is paid back to you during selling, you will be entitled to receive money only for the percentage of the property under your ownership. For example, if you have sold 70% of your property, you will get only 30% of the fixed sale amount.
Are Equity Release Schemes Safe?
Financial Services Authority, the UK regulator handles all the home reversion and lifetime mortgage schemes.
You can also opt for a plan offered by Equity Release Council providers which comes with a “no negative equity guarantee.” It ensures that you never owe anything in excess of the value of your home and there will be zero debt remaining to the property.
How much can You Borrow?
The amount that you can borrow is determined by a combination of various factors including your age and the value of your property. When an equity release scheme is applied by two persons jointly, the age of the younger applicant is considered.
When you are considering lifetime mortgage, the maximum loan amount is generally 50% of the value of the property. Younger applicants can expect lower percentages of loan amount when it comes to them.
In the case of home reversion, you may be able to sell off 100% of your property. The amount of return will depend on how old you are. Generally, the elder you get, the more returns you can expect!
Always Consult an Advisor:
Before you avail any equity schemes, it is recommended that you go to an advisor and consult with them. It is the easiest way to find out about the plans and get to know which ones are the most beneficial for you.
We can help you choose the best suited plan for you.
When you’re at an age when you have retired or are going to retire, equity release plans can ensure that you continue to lead a comfortable life without any financial difficulties hindering your happy life.