Equity Release Supermarket is an online website that offers you key financial advice. This website helps you compare equity release, find news, information, and articles. Since you have properly qualified financial advisers on hand to help you it can be helpful to consider this website as the one to go to as you edge towards retirement. Retirement is not as pretty as it used to be. In the last decade the mortgage market crashed, the UK underwent two recessions and home values are just returning as are higher interest rates. Several individuals lost their jobs.
The Issue
A lot of individuals getting closer to retirement were the first to be asked to leave from their long term jobs. They had higher pay and companies needed to keep afloat. It meant early retirement packages for some and for others nothing at all beyond the pension they had paid into. Since the market was also volatile with a lot of ups and downs this meant significant loss in their retirement accounts too.
The Solution
Equity release is a solution to retirement funding issues. When you feel you are going to be out of pension, savings, and other retirement account funds before death there are two main options. They are lifetime mortgage and home reversion. Both are considered equity release schemes although the principle behind them is markedly different.
Home reversion is a sale of your home all or in part. The amount you sell is returned to you in cash, a percentage value of your home. The part you do not sell is going to turn into cash when you decide to move from the home or you move on from this world. The money from the sale goes to you or your beneficiaries.
Lifetime mortgages as equity releases are reverse mortgages where you have no monthly repayment unless you go with an interest only loan. The interest only lifetime mortgage allows you to pay interest during the life of the loan so the principle balance never changes.
The Drawback
Not all equity releases work the same, which is where advisers from Equity Release Supermarket come in. They can direct you towards a product that is going to work the best for you as well as offer you advice on how you can help protect your inheritance. You should view equity release schemes as risky investments until you have a complete understanding of how they work. Furthermore, even if you do understand the inner workings you have to be careful that there are favourable clauses for you. Not all companies are going to work for you. In fact their goal is actually an investment of gaining money from you. This means they have their interests ultimately as a goal. You cannot get the best product when someone has a goal that is designed to benefit them the most.
The Inheritance Guarantee
If you have not yet heard the words inheritance guarantee from your adviser this is yet another reason to choose a place you can get unbiased, independent advice that will tell you about some of the protections you can have in place to make the equity release scheme more favourable to you.
The inheritance guarantee is setup prior to any lifetime mortgage. It states that a certain percentage you and the company have agreed on is not a part of the agreement. It means if the home depreciates they still cannot take the percentage of home left as inheritance. The structure of the loan has to ensure that you get a lump sum and the interest is charged, but within a range that is not going to require more from you. You set up the amount that is reserved for inheritance often based on the cash you feel you will need during your life.
The No Negative Equity Clause
There is another guarantee you should have in place. It is a no negative equity clause. This protects you and your family from owing beyond the market value of your home at the date it is sold. It is not like the inheritance guarantee because 100% of the home can be sold to repay the loan and any interest that has accrued. The advantage of this clause is to ensure if your house depreciates or is depreciating when you need to sell it or at your death when it is sold, your family is under no obligation to pay more than the house can be sold for.
As you can see there is definite reason to find qualified help from Equity Release Supermarket give the different jargon and specifics of products. Ensure your adviser is FCA regulated and part of the Equity Release Council so you can trust their advice.