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A leading new way to get an impressive sum of money, in which borrowers don't have to worry much about paying the sum back, is made possible through equity releases. An equity release has the astounding benefit of offering impressive sums of money for relatively little responsibility on the borrower's part.
The key benefit of an equity release is that they offer large amounts of money in return for a piece of property. The key here is that the borrower usually retains ownership of the property until his or her death, so the money may be enjoyed in the meantime. Because there is usually a variable amount of waiting time, most lenders like to make offers to those who are elderly or ill, although the healthy may apply.
The first benefit of an equity release is that it reduces the inheritance tax that one's descendants would otherwise have to pay. Less value in inheritance means less tax, so there is less to worry about as a result. Often times the lump sum given to the borrower is also passed down to descendants, who are more than happy to use the funds for funeral costs or other related fees. Different terms and benefits are available with different lenders.
There are some negative points to consider when obtaining an equity release. Most often, it means that anyone who would inherit the assets of the deceased will receive less than they would if the borrower had not gone through with an equity release. This holds true for charities, who will also receive less if they are to be given assets according to one's legal will. Weighing the benefits against the negative sides of an equity release with family members is always a good decision.
There are several different flavors of equity releases to keep in mind. The lifetime mortgage, for instance, is one of the most common. It allows for a loan to be secured against the borrower's home, which is then repaid upon death as the lender resells the property to recover lost capital. This method also allows for borrowers to keep the house ownership until death.
Other flavors of equity releases may include the home reversion, in which up to 100% of the property is sold to a third party. In this case, the borrower can still live in the home but has sold rights to another person or business. In return, the borrower receives regular income or a large lump sum in compensation for the exchange in ownership rights.
Closing Comments
Equity releases are great ways to enjoy the finer days in life. To see if you apply for an equity release, consider visiting several online and local lenders for more information. There are many different packages and plans to opt for, even if one isn't elderly or ill in some shape or form.
The key benefit of an equity release is that they offer large amounts of money in return for a piece of property. The key here is that the borrower usually retains ownership of the property until his or her death, so the money may be enjoyed in the meantime. Because there is usually a variable amount of waiting time, most lenders like to make offers to those who are elderly or ill, although the healthy may apply.
The first benefit of an equity release is that it reduces the inheritance tax that one's descendants would otherwise have to pay. Less value in inheritance means less tax, so there is less to worry about as a result. Often times the lump sum given to the borrower is also passed down to descendants, who are more than happy to use the funds for funeral costs or other related fees. Different terms and benefits are available with different lenders.
There are some negative points to consider when obtaining an equity release. Most often, it means that anyone who would inherit the assets of the deceased will receive less than they would if the borrower had not gone through with an equity release. This holds true for charities, who will also receive less if they are to be given assets according to one's legal will. Weighing the benefits against the negative sides of an equity release with family members is always a good decision.
There are several different flavors of equity releases to keep in mind. The lifetime mortgage, for instance, is one of the most common. It allows for a loan to be secured against the borrower's home, which is then repaid upon death as the lender resells the property to recover lost capital. This method also allows for borrowers to keep the house ownership until death.
Other flavors of equity releases may include the home reversion, in which up to 100% of the property is sold to a third party. In this case, the borrower can still live in the home but has sold rights to another person or business. In return, the borrower receives regular income or a large lump sum in compensation for the exchange in ownership rights.
Closing Comments
Equity releases are great ways to enjoy the finer days in life. To see if you apply for an equity release, consider visiting several online and local lenders for more information. There are many different packages and plans to opt for, even if one isn't elderly or ill in some shape or form.
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