| Equity Release |
Article Index for Equity |
Website Links For Equity Release |
Information AboutEquity Release |
| CATEGORIES ABOUT EQUITY RELEASE | |
| personal finance | |
|
TYPES OF ARRANGEMENT Interest only - A mortgage is made without the expectation that the capital need be repaid before death. Interest payments are paid out of the borrowers income whilst they remain in the property. Lifetime mortgage - A loan secured on borrowers home (a mortgage) is made to generate the capital. Interest payments are rolled-up on top of the capital throughout the term of the loan. The loan is repaid from the proceeds of the sale of the property when the borrowers die or move out (perhaps into a care home). The borrowers retain legal title to their home whilst living in it. Home reversion - You sell all or part of your home to a third party, normally a reversion company or individual. This means all or part of your home belongs to somebody else. In return, you receive a regular income or cash lump sum (or both) and you continue to live in your home for as long as you wish. Shared appreciation mortgage - The lender loans the borrower a capital sum in return for a share of the future increase in the growth of the property. The borrowers retain the right to live in the property until death. The older the client the smaller the share required by the lender. Home Income Plans - Are lifetime mortgages where the captial is used to provide an income by purchasing an Annuity often provided by the lender which is often an insurance company. ADVANTAGES OF EQUITY RELEASE DISADVANTAGES OF EQUITY RELEASE THE UK EQUITY RELEASE MARTKET The UK equity release martket was partial regulated in 2005. All mortgages, including lifetime and interest only arrangements now fall under the remit of the Financial Services Authority . Prior to FSA regulation many lender signed up to SHIP a voluntary code of conduct guaranteeing amoungst other things a ''no Negative Equity guarantee'''. The major players are Norwich Union (40%) Northern rock (28%) and Mortgage Express (17%) in 2004. High street banks HSBC and RBS have both entered the equity release business in Q1 2006. THE US EQUITY RELEASE MARTKET SEE ALSO EXTERNAL LINKS
|
|
|