Source: The Irish News —
HAVING covered equity release in as much detail as I could over the last few weeks, I’ll now detail the options available for those of you considering releasing equity.
There are two types of equity release (although I could argue that selling and downsizing is another).
A lifetime mortgage and a home reversion plan are the two equity release schemes.
Lifetime mortgages are the most popular for many reasons, particularly because of some of the downsides of the home reversion scheme.
Lifetime mortgages make up around 95 per cent of the market. They are pretty straightforward to understand, are flexible and portable.
The rate is fixed or capped, and the home-owner is allowed to make interest payments. There is a no negative equity guarantee, which means you will never owe more than the house is worth as interest rolls up. Perhaps the lifetime mortgage’s biggest advantage is the fact you still own the house and can participate in any increases in its value.
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