Release of equity out of one's property provides him or her with the much desired relief in the last phase of life. With much relaxed conditions in terms of securing tax free funds and without any requirement for repayment within lifetime, equity release is a solution to the retirees who are engrossed into a sticky web of persistent worries over their financial troubles.
Many a company is providing equity release schemes to help the homeowners take out the equities out of their properties to smooth the journey in their twilight days. When financial trouble engulfs an elder, the dream and desire of enjoying the last days of life begin to dip and dim. Chance of having a suitable solution to jerk oneself out of the problem seems to be very feeble. But equity release option is a streak of hope that spurts out extra bulk to be utilized for any purpose in sync with a property owner's needs.
Release of equity option is of two types – life time mortgage and home reversion plan. Lifetime mortgage is commonly referred to as reserve mortgage. With the first type of equity release option, a home owner is granted a loan against the released equity of his property. The loan is provided either as a lump sum amount or a series of monthly installments. There is no binding on the borrowers to pay the loan back till he is alive. He can surely pay off the loan but in case he can not, the loan along with the interest rate will be collected after his death.
The only problem if an individual does not make interim payment is that the immediate heirs can not inherit the property after the death of the person. If he repays the interest on time, the actual equities of the property keep on piling. With the other type of equity release plan, the owner sells off his entire property or a part of it though he is permitted to live in the house throughout his lifetime without paying any rent.