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Home Equity Loans Uncovered |
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There was a time when pensioners who were living off their state pension and struggling with day to day living expenses just had to make ends meet without additional financial assistance from the state. However, there has been a staggering increase in the number of people who, with the help of equity loan consultants are starting to realize that their property holds the key to a large chunk of finance to help make life just a little bit easier. The release of this finance is done through what's called a 'home equity loan' or just 'equity release' and this allows the applicant to get a lump sum or a regular monthly income. One is called the 'lifetime mortgage', where the homeowner takes out a secured loan.
Equity loan consultants can tell you that this is a loan secured on the property and is normally around 40% of the house value. Equity loan consultants can also inform you that the interest on the loan is then accumulated and repaid along with the capital when the homeowner dies, or if the homeowner goes into care and the house is sold off. The second type of equity release is called a home reversion plan and they are completely different than a loan, as all equity loan consultants can tell you. With this method the property is sold to a provider for a lump sum, the homeowner remains in the property and at death the sale of the property helps to pay the lender and any money left over is given to the relatives. The home reversion plan has only come under regulation recently and for a good reason. As a result, equity loan consultants report that a lot of companies were not very ethical in their selling and many people in vulnerable circumstances were convinced to sell their properties at massive discounts.
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