Gaining a Steady Income With a House Equity Release

A House Equity Release is a great way for a retiree to gain a steady from of income. In troubling economic times it is often difficult for a senior citizen to find ways to generate enough income to live off of, especially if their a portion of their savings were wiped out by a recession. These are also sometimes known as a lifetime mortgages, your banker should be aware of both terms.

What is an House Equity release?

An equity release is also known as a reverse mortgage. There are a few different ways that an equity release can be structured, but the most popular is a lifetime mortgage. In a lifetime mortgage a third party (the lender) will take control of the senior citizen’s home (now the borrower)and pay out either a lump sum or a steady flow of income. Usually the lender is either an insurance company or a bank, and the payout is in the form of an annuity. The payout comes from the equity that was built up in the home over the course of the mortgage.

Who is Eligible for a House Equity Release?

This program is only available for retirees. Usually you have to be at least 60 years old, but in some cases you can be as young as 55 to qualify for an equity release. Also, you must have equity in your home to be eligible. The lender is not giving you their money, it is actually yours. They are taking the money that they know is secure in the value of your home and letting your use it as cash.

What is the Catch to this Type of Loan?

The catch is that a House Equity Release can be expensive. There are a lot of start up fees as well as interest that must be paid on the money borrowed from your own equity. The interest, however, does not need to be paid until the sale of the house. This is usually upon death or after the borrower leaves the house for greater than 12 months. Also, just because the third party has taken control of your home does not mean that there will be no costs. You must still pay for all maintenance and bill associated with the property.

Talk to a specialist today to find out if a Lifetime Mortgage or House Equity Release program is the best option to help solve your financial worry’s.