Tag Archives: Home Reversion

Equity Release

Household Finances Could Fall to 2005 Levels

If you were wondering what the true impact is of the current economic crisis and austerity measures, we now have a much clearer picture on how the finances of many families are suffering in real terms. It has been revealed that family finances are likely to equate to the levels we had as far back as 2005 – that is a fall back to levels 9 years ago. The recession is over, but there are still struggles as the economy slowly gains momentum. For retirees it is time to think about equity release and if it makes sense to take out this product to help stimulate the economy and live an easier retirement.

Salaries and Cash Flow
The reasons behind this are mainly due to the fact that salaries are either rising at pathetic rates, or for the most part, are actually continuing to fall when more and more companies are struggling to keep their heads above water during these hard times. You also need to bear in mind that taxes and cut-backs are paying a weighty toll on family incomes.

Cash flow is still not as stimulating to the economy as it was prior to the two recessions. In fact there is a larger emphasis on saving money right now. It is the first time in more than a dozen years that saving money has been important. When you consider the troubles the economy is facing right now and consider your retirement you may be worried.

If you are on the eve of retirement age such as 65, still have a mortgage, and worry your pension is not going to cover expenses consider your options.

Retirement Funding Choices
As a person heading in to retirement, you could hold out a few more years to try and save a little more towards your pension. Many also consider retiring, but hiring on in a part time position. Part time jobs are difficult right now though so you might not be able to find something you could enjoy as a partial retirement.

Another choice is to sell what you own by downsizing into another home, fewer cars, and other things you have. You could start to live a moderate life with few entertainment options. You may not be able to take those holidays you waited for given your pension and retirement funds, but you could live comfortably.

Your other option and one that continues to gain notice is releasing funds from your home to live on. With this in mind, it is no wonder that people are looking to measures such as equity release plans to tide them over. We all hope for better years in the future and the mentality seems to be that we need to do all that we can to protect our way-of-life and ensure that our family does not suffer too much. These plans release cash from your home turning your cash poor situation into one that is comfortable. Of course you need to be property rich in terms of having enough equity to make this concept plausible.

Home reversion and lifetime mortgage choices help you gain equity from your home to live on comfortably. You can still downsize and maintain a modest life, but you also have rainy day or holiday funds. With plenty of benefits such as tax free cash, using it as you want, and helping family it can be the perfect solution.

There are disadvantages to these plans, of course, but you can also benefit. It is a choice of what is right for you and how you want your retirement to be like when the job situation is not looking so great. The whole point is that you might be able to hold on and not retire versus not using equity. If the economy and employers won’t sustain this option then you have to look for alternatives.

The Shocking News and your way around it
This shocking statistic is definite evidence of the fact that the austerity measures implemented by the Government are hitting every household much harder than was originally forecast. Many people were opposed to such a stringent programme being introduced to take care of the debt the country is in; they favoured a longer-term and far less painful plan.

This is all a catch 22 situation at the moment. Many people are so grateful to still have their role of employment at the moment that they would not dare to rock the boat, so to speak. It would appear that employers are fully switched into this mentality and for the most part, are taking full advantage of this. So you could take advantage of equity release and retire on time.

Equity Release, Home Reversion

Should I Choose a Home Reversion Plan just because of the Home Reversion Providers?

A home reversion plan is where you sell part or the whole 100% of your property to home reversion providers. In return you receive a tax free lump sum or a monthly income, whilst you are able to stay in your home rent free. Home reversion plans are offered to those who are 65 and over. The home reversion provider recoups their money when the property is sold. This only happens once you have died or move into a long term care centre.

Some examples of home reversion providers are Bridgewater, Newlife Mortgages and Hodge. As these types of companies are in competition they usually offer competitive rates or perks for choosing their products. A customer usually finds that they have loyalty to certain companies as they believe that they are the best provider due to commercials.

This actually might not be true. The plans that providers supply can differ so a customer should actually find the plan that suits their needs. Just because they think a company is the best provider does not mean they will be getting what they need from an Equity Release scheme.

Some companies will require you to sell a certain percentage of your property, others offer better rates based on the property value, and some will only give you a lump sum if you sell all of the property. There are lots of different plans and all have a set of terms that must be followed.

Instead of just picking the provider that you think is best, shop around. You can get quotes from different home reversion companies online with no obligation to proceed with them. This means you are then able to compare the plans of each company and what they are offering. You can also get in touch with a sound independent financial adviser. They will do the research based on your needs finding the provider with the best plan that suits you.

Your home reversion plan is not based on the provider and the provider can actually become irrelevant when choosing a plan. Your home reversion scheme is then based on the plan itself, not from where you obtain it. This is because it has to be suited to you and your needs. As a customer that is what comes first rather than obligation to any of the home reversion providers available to you.

Before you start your search for a provider, it can benefit you to understand some of the main benefits of home reversion versus lifetime mortgages. You have both options available to you. Looking at only one choice in your retired life can be limiting. You may learn after the choice in home reversion plan is made that there was something entirely different and better, unless you continue reading.

Lifetime mortgages are loans where you do not make a monthly payment, but instead obtain a lump sum of money or monthly instalments to help you pay your expenses. You do not sell your home. The main difference is that you have an outstanding debt on the property that has to be paid by your beneficiaries. In most cases this means the home is sold because your beneficiary is unable to pay the loan off after you die or move into a long term care centre.

It is the main difference of selling your property or having a loan on it that usually decides a person’s mind regarding home reversion versus lifetime mortgages. Yet, there are other considerations like your age and life expectancy. A younger person, age 55 and older, can obtain a lifetime mortgage. However, life expectancy is usually more, which can cause a lower lump sum or monthly payment to be paid out.

You do have choices with lifetime mortgages in whether you draw a monthly payment or get a lump sum. You also have the option of obtaining a mortgage based on your health, where an illness can pay out more and in a lump sum due to a lower life expectancy.

As you search around for home reversion providers remember the differences discussed above in order to determine which type of plan would be the best. If you do not like leaving debt behind for your family, the clear choice is home reversion. You also guarantee a small inheritance based on the amount of property you did not sell, which often satisfies the worry of your family or beneficiaries being left without anything. Agents registered with SHIP from the above named companies are the best to seek out if you have questions.