Member Article

Looking for an Euqity Release Plan? Ask Experts

Financial planning, which includes tax planning, the release of equity on mortgage (house or any of your capital assets), monitoring the value of the mortgage, requires expert advice, especially for those nearing retirement.

How is Equity Release important to you as an area of investment?

An equity release plan allows you to use a part of the cash value of your home. The mortgage can be for a lifetime or it can be a home reversion plan (a portion of the house is sold off for a fee). In return, you get a lump sum payment or regular fixed payoffs. The benefit lies in the fact that you need not sell off your home or move house. Your property is your very own and is also earning you a regular income. For those in their mid-career stages, this can help them pay off existing loans, buy a new car or simply for re-investment. But this is a must for those nearing retirement. They can buy a retirement benefit plan with the lump sum amount from the equity release. Thus, ensuring a smooth post-retirement and lesser dependence on savings and meager pension plans.

Who benefits most from Equity Release?

Certified retirement financial advisor reveals that these plans are woven specially for the retired and elderly. This segment of society depends solely on interest amount from savings and pension plans. An equity release plan thus ensures peace of mind and at their age they need not move house or worse, sell it off. And as they come with a lifetime guarantee, their families need not pay for the plans after they expire. Thus, those above 55 years are increasingly looking at house equity release schemes as a very lucrative arena of investment. This would generate their weekly incomes while offering a lifetime pension guarantee. These schemes are provided up to an age limit of 70 years.

Why do you need advice for investment in equity release schemes?

It is important that you approach a financial adviser for equity release advice. The retirement financial advisor has a better idea of the loan providers in your region. Consider these before opting for an equity release plan:

1. At what stage of life are you and what is your life expectancy? 2. Are you receiving any money towards your care and hence are you eligible for an equity release on the house? 3. Does the plan allow you to move house as you may need to live closer to your relatives in old age?

Types of Equity Release Schemes

Equity release providers offer a string of plans for policyholders. But these can be broadly broken into two types: lifetime mortgage and home reversion.

Equity release schemes are beneficial for a large social stratum but with wrong advice, you may end up paying more than you earn. So, you need the advice of an independent financial advisor who will go through your case and suggest the best suitable plan for you.

This was posted in Bdaily's Members' News section by Paul Christy .