Post War Baby Boomers can now give themselves a complete new lease of life through an equity release scheme. These just lately retired dwelling owners are often house rich however cash poor due to lack of good pensions and the ever rising value of living.

Equity Release Explained

Equity release is the most common name used for schemes that release money locked up in a retired residence owner’s property. The term ‘Equity’ means the amount of money worth that may very well be realized on the sale of a property. Cash strapped retired residence owners are often house rich however money poor throughout numerous stages of retirement. Soaring living costs that out strip inadequate pension provision is the primary factor that affects the quality of life and even the essential essentials, for what must be retirement golden years for many publish war baby boomers. When children grow up and go away home, some retired home owners with large properties are able to trade down to a smaller decrease value property and launch the money (equity) of their larger house. However trading down is probably not an option for many, as their present property might not be massive enough. Maybe they simply do not want to move for many reasons such as emotional attachments, close proximity of family members and mates etc. So what are the options to trading down? With the exception to selling your house and renting another property, there are different ways to launch the cash locked up in your house.

Totally different Types of Equity Release Schemes

Broadly speaking, these two completely different types of equity launch schemes are sometimes known as a Lifetime Mortgage and ‘Home Reversion’. Basically a life time mortgage as the name implies, is a mortgage for life. There are many variations on this theme with fixed rates for life, curiosity rolled up and draw down schemes, to name but a few. The principle characteristic of the lifetime mortgage is that ownership of the property is retained collectively with the benefits of increased property values. When the house is sold, the lender is repaid and the balance is retained by the house owner or their estate. The other type of equity launch scheme is known as Home Reversion. Essentially this is a way of selling your property at a discounted value for the lifetime right to live virtually rent free. The time period ‘Reversion’ could appertain to the truth that the property finally reverts to the investor that provided funds to the house owner. The benefit of this scheme is that more cash can often be launched through a reversion plan than a Lifetime mortgage, particularly for older residence owners. Once more there are a lot of variations on the theme, reminiscent of a component reversion, whereby only a portion of the property is used to provide funds.