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Different types of equity release

Different types of equity release

Equity release is a simple scheme which enables a home owner to borrow money of the said property all the while retaining possession at its full capital value and not having to worry about making repayments for the mortgaged property. There are a number of known advantages of equity release thus making it a very lucrative scheme of mortgage which can provide you with a lump sum amount of money.

The different types of equity release normally include:
Interest payment flexible lifetime mortgages: the biggest advantage of this kind of equity release plan is the flexibility of payments that can be made against the mortgage. This scheme is applicable for people who want to make regular payments despite having the option of making no mortgage payments on a monthly basis, allowing the interest element to accrue. this way full or part payments can be made regularly against the mortgage for equity release.

Interest payment lifetime mortgages: There are a number of people who want to take out equity on their homes, which has been made possible with this particular type of equity release. The monthly interest that accrues is the only payments which have to be made against the mortgage. This will reduce the value of the equity release taken over the home over time.

Protected lifetime mortgages: These are basically short lifetime mortgages with pans which can eventually guarantee an inheritance from your family, at the end of the equity release plan. A part or percentage of your priority has to be elected to be reserved for the next heir, in case you want to retain after equity release.

Enhanced lifetime mortgages: These equity release plans are very beneficial for people who are suffering from certain medical conditions. Enchanted lifetime plans can mainly help get more money than what you would normally get out a life time mortgage at very beneficial rates.

Drawdown lifetime mortgages: These mortgages are more flexible which allows you to draw money against the mortgage at various stages rather than receiving a lump sum amount for the same. Th interest will be applicable only for the portion of money drawn which is an added benefit. Your property ownership does not get affected in the process.

Lifetime mortgage: This is the most popular form of equity release mortgage, which simply explained is an amount received, a tax-free loan secured against the property with you still retaining 100% ownership of your home or estate. There are no monthly payments that need to be met in the case of this mortgage with the lump sum interest amount on the mortgage to be paid after the property has been sold or released.