How does an equity release plan work?
My mum lives in Manchester, and one of her friends told her about an interest-only mortgage that she used for her property.
Equity release is where you release value from your property. You still own the property, and one day the loan must be repaid, but typically no monthly payments are made, and the interest is added to the outstanding balance.
Lenders will lend more to older people, and it is possible to either have a lump sum, or to take a monthly drawdown, which means that interest will accrue more slowly.
Generally the loan will continue until death, or the person has to leave the property due to ill health.
It is a relatively complex area as it can affect benefits, and it is important to speak to a specialist. | 12.03.10 @ 16:12
designed really for the over 60s. People can maintain control of the property if they take a "lifetime mortgage" of effectively lose control but live in the house for the rest of their lives with a full equity release. | 12.06.10 @ 17:33
Actually, not all equity release schemes involve the original owner retaining their ownership. Home Reversions involve selling a part or all of the property. It is only with a lifetime mortgage that the original owner always retains ownership with the mortgage debt registered as a first charge (in the same way a standard residential mortgage is charged). | 12.07.10 @ 13:10