How to Fund Your Dream Holiday in Retirement with Equity Release

Photo by Natalya Zaritskaya on Unsplash

Do you want to go on that once in a lifetime holiday? Are you uncertain how to fund it?

The financial market has been growing since the 1960s, and with technological advancements today, the rate of growth is even higher.

One of these incredible financial products is – equity release – which, according to John Lawson from SovereignBoss, had hit a new record, after the several years of growth, with retired homeowners withdrawing over $4 billion in property wealth. But is it a good idea?

However, in as much as this product has won the hearts of many homeowners, almost 30% of proprietors don’t know about equity release and what it entails.

Lucky for you, if you’re in this percentile, this guide will take step by step in what this product is, and how you can finally get the chance to visit your favorite country by using this plan.

Go On That Dream Holiday & Fund It With an Equity Release Plan

Have you heard about equity release plans? Do you know that unlike other residential mortgage plans equity release offers you the opportunity to enjoy financial freedom and also spend it as you wish without having a laid-out business plan?

Are you still confused?

Well here’s all you need to know about equity release plans.

What’s Equity Release?

It’s practically a way of releasing the wealth tied up in your estate without having to move or selling it to the highest bidder.

Why is it the most suitable financial product?

Well, the scheme allows you to unlock this capital, via series of dogmata that enable you to access – or ‘drawdown’ the cash later on, based on your necessities, and if you’re over 55.

You also don’t need to have entirely paid off your existing mortgage. However, when you get the cash, you’ll be required to clear off your mortgage first before anything else.

Moreover, with this plan, you don’t have to make any monthly payments. It allows you to enjoy your cash and reimburse your plan provider when you die or move out permanently. As a rule, however, you need to reside in your home as your primary residence.


Types of Equity Release

Currently, there are two popular forms of equity release schemes. The:

Lifetime Mortgages

It’s the most popular type, and it gives you the freedom to choose whether to release your money as a lump sum, or in several drawdown payments.

You can also choose to hold onto some of the value of your residential property as an inheritance for your family. It gives you the much-needed advantage of enjoying releasing equity while also making sure your children have something reserved for their future.

Unlike other mortgage plans, this plan also offers you a variety of options to choose from. Some of these include, but aren’t limited to:

  • The drawdown plan enables you to take the cash in stages as per your needs
  • The enhanced scheme Lets you release more equity from your estate if you have a qualifying health condition
  • The buy-to-let plan – it’s for those looking to borrow against or acquire a buy-to-let property.
  • The income lifetime mortgage plan – enables you to top up your retirement income, through getting a fixed income every month into your account
  • The interest-only plan – they let you pay the interest due each month – meaning that the size of your mortgage repayment never goes up.

Home Reversion Plan

The scheme allows you to access all or part of your residential property’s value while letting you reserve the freedom to live in the house, rent-free.

Here, your equity release company of choice purchases a part or the whole percentage of your estate. So you get to know precisely what proportion of your residence you have parted with and, in the same way, what you can ring-fence for inheritance purposes.

The percentage you maintain in your property will always remain the same regardless of any fluctuations in the estate market value unless you opt to take any additional cash releases.

Therefore, with this incredible financial product, when your loan term ends, the lender sells the house, and then they share the sale proceeds according to the residual proportions of ownership.

Times are changing, and as the value of money increases and the population grows, the cost of land and property keeps skyrocketing too. With that, you need to keep looking for ways to ensure that you continue enjoying the perks that the world has to offer, and that’s where an equity release plan comes in. So don’t be left behind and get your scheme today and visit those destinations you’ve always dreamed about.


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