What are retirement equity release mortgages?
July 13, 2012 | scott
For many people the home is the most valuable asset they have. However, accessing the equity can be very difficult unless you sell your home. Equity release mortgages, sometimes called reverse mortgages, are mortgages that allow you to access the equity in your home without selling it. It works similar to a home equity loan except it doesn’t have to be repaid as quickly. You keep the money until you either sell the house or pass away.
There are two types of equity release loans. Lump sum max loans pay you a large up front sum of money. This can be helpful to cover large medical bills or perhaps send a grandchild to college. The second type is a flexible loan. This plan lets you take out smaller sums of money over time. This is a great option if you don’t have retirement savings or perhaps just want to tour the world. Sense neither loan has to be repaid until you die or sell your home it allows you to enjoy it without the stress of payments.
Equity release loans can be very helpful tools. The delay in repayment takes a lot of stress out of borrowing money. However, it is a major decision so you should consult your financial adviser and or accountant. Equity release mortgages also have an effect on estate planning so you may want to discuss it with your family members as well.