Equity Release plans offer many people the opportunity to release money from their property without having to move or sell the property. This is fine for those who have a property in which there is much equity to release, but how do you know how much or whether infact taking out an equity release plan will work for you?
What Can You Get?
If you are making plans for early retirement or making a big lifestyle change that requires extra money, knowing how much you can get if you take out an equity release plan (or a reverse mortgage plan) will help you to gauge whether it will be worth you while. How much you will be able to get from the equity built in to your property may depended on many different factors.
You age and the age of your partner (or any other owners of the property) is a major determinant. You cannot take out an equity release plan if you are younger than 55. In most cases, companies that offer equity release mortgages are businesses who wish to see a return sooner rather than later.
They are willing to offer you a loan based on the fact that your age, on the basis of probabilities, means that the older you are when you take out the loan the quicker they will get the return once you and/or your partner die, at that point the property reverts to them and they are able to realize the capital growth. If equity release loans were offered to younger people, there would essentially be longer to wait to realize the profit from the transaction.
When companies such as Northern Rock, or JP Morgan offer customers an equity release mortgage, they offer people who need extra money policies that suit their particular circumstances. Don’t make the decision on equity release plans without checking all your options first.
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