The living costs are gaining momentum on the graph each day. But do not lose heart yet, there are some schemes that are available like the equity release plans which will help you cover up whatever big or small amount that is falling short in the property value. The Equity release is a good option for all the retired home owners who are more than 55 years old. If they participate in the Equity release scheme, then they will be able to cover the shortage in the pension amount that they are receiving now.

If you are one of the retired home owners, here is a guide to help you get started with the Equity release scheme:

The Equity release scheme consists of some financial accessories that are needed for release equity home. It does not require any monthly payments either. If you are 55 years of age or more, then you stand to be eligible for the Equity release plans. There are two different categories that you can choose from- the home reversion plan and the equity release scheme.

The maximum amount of Equity release that is offered can be taken in a bulk amount or you can choose the minimum bulk payment and take the rest by the help of a drawdown. The drawdown is a facility that is available for all the life time mortgage schemes. It is an option where you can take out the minimum amount in bulk from the lender and the remaining balance can be taken out in future through multiple payments as per your necessity. There are some conditions though that is applicable in case of the draw down equity release home facility. But if you look in the long run, this is rather cost effective when you are considering an equity release plan.

 Types of equity release schemes

Although there are many different plans available, they can all be split into four main categories of equity release schemes.

1. Lifetime Mortgageequity release schemes

You release a lump sum from the value of your property, whilst maintaining 100% ownership of your home. This amount, plus any interest accrued, is repaid from the sale of your property when you pass away or move into long-term care.

 2. Drawdown Lifetime Mortgage

This is similar to a lifetime mortgage, but with added flexibility. The cash can be released over time, as and when you need it. Because you only accrue interest on the funds once you have taken them, this can reduce the amount you pay over time (when compared with a lump sum).

 3. Interest-Only Lifetime Mortgage

This is like a standard lifetime mortgage; however, you make regular payments so that the amount you owe remains constant. This amount would then be paid from the sale of the home, typically once you have passed away.

4. Home Reversion Plan

Here, you sell some or all of your property in exchange for a lump sum of money, whilst maintaining the right to remain living in your home, rent free, for as long as you live.

Choose the right equity release scheme for you

To ensure you get the most benefit from equity release, it's really important you choose the best plan to suit your individual needs and circumstances. Our qualified advisors can explain each option to you, and provide you with a full, written equity release recommendation without any obligation.

There's never any obligation on your part and, if we think equity release is not suitable for you, we'll tell you straight away.