Which Type of Equity Release to Choose
The equity release market has been changing over the past few years. The changes are largely in response to the increasing age of people who use this type of financial product. Changes have also come about due to new regulations that were introduced for lenders, and a greater awareness among consumers. There are different types of equity release now, suitable for everyone.
One change is that many more providers now offer lifetime mortgages, which means they cover both capital repayment at maturity as well any interest accrued during the loan period. This was not always possible with earlier versions of these loans because mortgage repayments would used up all or most of your income leading up to retirement when you could no longer work full time. As result, it was hard for seniors on low incomes to access home equity without having other assets such as pensions or investments.
Another kind of equity release product that has become popular in recent years are products like the “shared lifetime” and “partnership buyout” mortgages, which enable couples or partners to share their home over time without one person paying off the whole amount at once.
Equity release can also be used as an additional source of income in advance payments while still working full-time or part-time gigs – this is because there are now some providers who offer monthly withdrawals from your property portfolio to cover living costs.
This type of product is called a lifetime mortgage and it’s where you borrow from your home equity to cover living costs when you retire or are no longer able to work for some reason, such as health problems or becoming unemployed. Withdrawals are income-tested so will not affect the amount of pension credit entitlement that retirees receive under state retirement schemes – this means they can still secure their full basic level of Pension Credit without affecting other benefits like Income Support, Council Tax Benefit etc.