Equity Release On Property – Cash The Equity And Secure Financial Freedom

By Author: Jimwright
Total Articles: 100
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Are you worried about your retired life? Not sure how to cope with changed lifestyle after retirement? Your monthly income is going to reduce not the living cost – you have to prepare for it.


Retired life is not meant for worries, tension and troubles. After working hard for so many years, now you need some peace and rest. A little bit of planning could help you secure financial freedom after retirement.


Investing in annuities, buying retirement plans etc. can actually help you make your finance bright after retirement. For this you may need to start the planning earlier. You have to keep your eyes open so that you do not miss a single opportunity and a single threat as well.


Equity Release on Property


This is another way of securing financial independence after retirement. If you have paid off your mortgage you can go for equity release plans. By releasing equity on your property you can cash the accumulated equity and use it to make life easier.

Equity is basically the value of your property in current financial market. ...
... If you have mortgage, then the amount you owe to your lender is subtracted from the value of the property to calculate the equity. Equity release on property means selling the value of the property and getting cash in turn.

There are many equity release providers; once you decide to go with equity release on property you have to contact those lenders. After reviewing the property and your application, they suggest you the right type of equity release plan.

Unlike quick sell or fast house sell plans you do not need to leave the house. The lender will not evict you from your house. You remain the legal owner of the house until your death. It is mentioned explicitly in the legal deed that who is the owner of the property and when the ownership is to be transferred to the lender. Usually, as long as the borrower or the borrower’s spouse is alive, which one is longer, the lender does not get the ownership of the property.

You may ask the sell and rent back plans offer similar features. I will say ‘No’; there are differences. If you go for equity release on property, you remain the owner of the house. But when you sell to rent it back, the new buyer becomes the owner of the house and remain their as a tenant. The buyer may not ask you to leave the house but officially they are the owner of the property.

By releasing equity you do not need to pay any rent to the lender. After your or your spouse’s death, as stated in the agreement or whichever takes longer time, the lender takes over the property. You have to choose the equity release plan carefully. Some plans offer you a lump sum amount, some plans offer you a steady income whereas some plans off you both. Know your options, understand your requirements and then go for equity release.