It can be difficult to find money when a health emergency arises or an urgent home repair is needed if you’re living on a fixed income. However, you may be able to get the money you need from the equity in your house. Here are some of the ways to take advantage of the equity that you’ve built up in your house to get a loan.
Equity Release Schemes
Some of the most popular ways for retirees to get cash when they need it is through equity release schemes. In most cases, they will let you borrow on the equity of your home without making repayments until you need to move into a nursing facility, or the money you owe will come out of the sale of your home after you and your spouse have deceased. There are several types of equity release plans, including the ones listed below.
A lifetime mortgage allows retirees to get a lump sum of cash from borrowing on the equity of their homes. They can borrow up to 50% of the property’s value, depending on their age. To get an equity release loan, homeowners must be at least 55 years old. Get more information by visiting responsibleequityrelease.co.uk.
Drawdown Lifetime Mortgages
Instead of borrowing a lump sum of cash, you can borrow money as you need it with this type of equity release plan. The main advantage to this plan is that interest only applies to the amount you have borrowed. It doesn’t require repayments until your home is sold after you and your partner have passed on.
Enhanced Lifetime Mortgages
If you have a chronic illness and need to borrow more than what is allowed with a regular lifetime mortgage, then you may be able to take more money out of your home’s equity with an enhanced lifetime mortgage. People with diabetes or heart disease, who smoke or have high blood pressure, may have medical bills if they need treatment for their illnesses. They can get more money to pay their bills by borrowing on their home’s equity.
Protected Lifetime Mortgages
For retirees who want to ensure that some of the money from the sale of their home goes to their children or grandchildren, a protected lifetime mortgage will help them do so. This type of plan elects to protect a portion of the property’s value for your beneficiaries.
Interest Payment and Interest Payment Flexible Lifetime Mortgages
Since a lifetime mortgage is a loan on the equity of your house, interest accumulates on it, reducing the amount left over once the borrowed amount is repaid when the house is sold. However, you can make repayments on the interest to reduce the amount taken out of the proceeds of the sale.
With the flexible plan, part or all of the monthly interest amount can be paid, or the interest payments can be stopped and the loan reverted to a regular lifetime mortgage. These equity release plans can help retirees get the cash they need to pay emergency bills or make repairs to their homes to maintain or increase their values.