Equity release plans – live with self esteem
There are certain situations in life that requires your immediate attention. Such situations do not come with a prior notice to help you be prepared for them, for example, sudden hospitalization of a family member or an accident. Some of these situations demand you to be strong and hold on while some requires strong financial backing to tide over it. In the latter situation where you need money to overcome a problem, if you are still working you can easily take a loan and repay it with your salary. But if you are retired and your saving or pension is not much then it is indeed a problem.
All you can do is in conditions like that mentioned above is borrowing or selling your property or mortgaging your property. But are they practical enough options? Borrowing will hurt your self esteem, selling will leave you homeless and mortgaging leaves you with the same risk as well. Another more practical option is equity release plans. They are very much similar to mortgaging but not entirely so. For instance, equity release plans will not leave you homeless even if you are unable to repay the loan amount ever. You must be wondering how these equity release plans work then. A brief outline is given below to help you understand the basic idea of equity release on property.
You take a loan against your property from a company offering equity release on property. The loan amount would depend on the valuation of your property and the evaluation process will be completely transparent to you. You can choose to receive the loan as a lump sum amount or as monthly installments depending on your needs. If you are unable to repay your loan amount, you can continue to call your property your own but only till your death, after which the property will belong to the company which gave you’re the equity release on property loan. This is a general idea of equity release plans.
The biggest and probably the only disadvantage of equity release on property is that you would not be able to leave anything for your beneficiaries if you are unable to repay the loan. But it is better to live a life of self esteem than holding on to your property for the sake of your beneficiaries. Anyhow, for this very reason equity release on property is better suited for people without beneficiaries.
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