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The Impact Of Equity Release On Your Family
One of the myths associated with equity release is that you won’t be able to leave a property if you take out the plan. However, you need to understand that this case is not true most of the times. The equity release reduces the capital in the estate as you will be borrowing money and will need to repay the borrowed amount at some point in time in the future. Consult an equity release money saving expert to help you with the plan.
You can adopt several measures if you want to minimize the impact of your release by taking small measures as listed below:
Considering the different types of lifetime mortgages
Consider the drawdown plan where the lender offers you a ‘cash facility’ which can be used in whichever way you want and you will also need to pay interest on the amount that you borrow. This means that you just need to take a small amount, and the rest will be paid in terms of interest.
If you need to use your remaining facility, then you can pay interest whenever you want to do that, which means that you will need to pay less interest over the lifetime of the mortgage. It would be best if you consider equity release advisers to suggest you a proper plan.
Another type of mortgage is the interest-only lifetime mortgage with which you can make the monthly interest repayment. With this, you will just need to repay the starting amount that you have borrowed. This can prove to be a great choice if you are concerned about the compounding interest and will be able to make monthly repayments.
Last but not least, voluntary repayment lifetime mortgages are also quite useful and are used if you cannot make regular interest repayment. This plan offers the flexibility of repaying up to ten to fifteen percent of the original amount that is borrowed without any penalty. These payments can be either ad-hoc or inclined towards self-management of the future balance.
If you want to give your partner more security once you pass away, then it is advised that you opt for a joint equity release plan. This would ensure that the equity release plan will continue in your partner’s name, and they will not be required to sell or leave the property. Due to the increasing living costs, more and more people are using equity release to leave a living inheritance after they pass away. It is advised that you research well on this before taking any step.
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