Equity Release Mortgages - The Lifetime Mortgage

Equity release mortgage is a unique mortgage loan designed to help old retires access the equity stored up in their homes. Many old retires in the UK find it hard to fully meet their needs due to limited pension funds and the rising cost of living. Some of these old people who have problems accessing needed funds own homes that have greatly escalated in value. The equity release mortgage program allows them convert a part of their home equity value into cash to take care of their needs.

Equity release mortgage is usually also referred to as lifetime mortgage and offers a viable option for old ones to access much needed funds to cover cost related to things such as medical fees, vacation fess, to renovate the home or simple make the remainder of lives more comfortable. The loan program allows them to borrow money against the value of their homes and the debt remains unpaid until after the home is sold at the death of the loan beneficiary. After the home is sold and the lender paid, the balance is given to the heir of the beneficiary.

With equity release, the lender agrees to loan you an amount on the agreement that he/she shares an agreed portion of the sale proceeds of your property at your death. To qualify for the loan you would need to be at least 60 years of age and own a home of your own. If you have a small percentage of the mortgage of the home still outstanding, you can use the equity release loan to pay it off and fully own your home. It is also advised and required that an Independent Financial Adviser (IFA) look through your finance and circumstance to ascertain that it is the best option for you.

There are three types of equity release mortgage programs. They are Home revision schemes, Lifetime mortgages and Interest-only mortgages.