Obtaining Equity Release Advice to Finance a Vacation
Many people spend their entire life working hard to make sure that they have a financially secured retirement and a house of their own. Most of them make sacrifices to ensure this as well as making sure that their children have the right upbringing and the best education. Raising their children and paying for their education, meeting daily living expenses and saving for the future leave no room for vacations. Most people spend their entire life longing to go on their dream vacation but do not get the opportunity to do so either because they do not have the time to do so or they cannot afford it. There is a solution found by seeking equity release advice.
Once they have retired, there is no better time for them to go on their dream vacation. They certainly have the time to do so and when it comes to finances, there is one great option which will allow any retiree to be able to afford a dream vacation – equity release. Those looking for lifestyle enhancements during retirement can easily turn to equity release schemes to provide them with the financial aid that they need to make them possible.
Obtaining equity release advice as to how to best release cash from their home is quite easy. There are several different equity release plans. There are those that require no monthly repayments and there are those that require monthly interest payments.
The lifetime mortgage is one of the most popular equity release schemes especially the drawdown lifetime mortgage. A drawdown equity release allows for monthly instalments to be taken by the homeowner. There is an account set up with a limit. The limit is the amount of equity fully available to the homeowner. This limit is not charged interest. The only amount charged with interest is the amount withdrawn from the account. It is the reason drawdown is considered the most appealing, since homeowners take what they need and are only charged accruing interest on what they need rather than the larger sum.
Interest only lifetime mortgages are another option. This particular type of lifetime mortgage requires a monthly payment. It is based on the interest that accrues on any money drawn from the equity release account. It keeps the principle balance from increasing during the homeowner’s lifetime, thereby making the final payment more reasonable for heirs.
Advantages to Consider
• The most appealing feature of the lifetime mortgage is that the homeowner can obtain a loan against his property and does not have to make any repayments for the rest of his life unless he wants to.
• House ownership remains in the homeowner’s name.
• Potential inheritance for beneficiaries.
Lifetime mortgages may not leave an inheritance for family. This is a disadvantage – remember, it is also an advantage in the event the homeowner chooses a plan that is easier to pay off. The amount the homeowner takes out for the equity release determines the principle balance to be paid. If the homeowner pays interest on the loan for life this can leave an inheritance and property values can increase to make it possible for their family to gain a little on the sale of the house.
Before using an equity release plan for a vacation or other situation talk with family and get equity release advice from a professional. By speaking with a professional the homeowner can learn more about the advantages or disadvantages of each plan. There are more options like home reversion that provide other advantages and disadvantages.
Home reversion actually sells a piece of the property the homeowner lives in. The returning favour is tax free money and a lifetime tenancy agreement to stay in the home. Unfortunately, the house has to be sold for the provider to reap the benefits of this scheme. Yet, it is a scheme the guarantees a little inheritance where lifetime mortgage offers only a possibility.
Equity release plans are great ways of obtaining the money needed to finance a vacation; however, the cash released from a property can be used to finance so much more than a vacation. The fact is that people may have aspirations of their own. Regular holidays in retirement may appeal to most in order to get out of the house and live a little which is why it is so common for retirees to release money from their property in order to pay for the vacation of their dreams. Let equity release advice from an adviser help you make a decision.