A leading new way to get an impressive sum of money, in which borrowers don't have to worry much about paying the sum back, is made possible through equity releases. An equity release has the astounding benefit of offering impressive sums of money for relatively little responsibility on the borrower's part.
Equity releases are usually paid back upon one's death, as they are tied to the property of the one applying. Once the applicant has left behind his or her assets, the business who offered the equity release will then take control of the property or other objects in payment for the initial lump sum or periodic payments. This has several definite benefits and drawbacks for the applicant.
The benefits that an equity release offers for descendants is also vast. First, the descendants will be able to enjoy a lesser inheritance tax to pay. Inheritance tax is based on the total value of the inheritance, and without an expensive property to value the tax is much easier to pay. Any leftover money not spent from the sum obtained by the borrower is also made available to descendants in most cases.
Things aren't always on the plus side with an equity release, however. Descendants and relatives who succeed the applicant will inherit less capital or assets as a result. In the same sense, any charities that were to receive money according to a legal will also suffers the same fate. This makes the debate of whether or not to opt for an equity release quite tough, and one which should be discussed with family members before making a decision.
Once one decided to go for an equity release, there comes the problem of obtaining the right flavor. The most common is the lifetime mortgage, which allows borrowers to keep their house and still enjoy a large sum of money in return. Upon death, the borrower then sells the property to make up for the capital given to the lender. This is most popular for the sole reason it allows the home owner to retain ownership rights.
Other flavors of equity releases may include the home reversion, in which up to 100% of the property is sold to a third party. In this case, the borrower can still live in the home but has sold rights to another person or business. In return, the borrower receives regular income or a large lump sum in compensation for the exchange in ownership rights.
In Conclusion
Making a quick sum of money to enjoy life to its fullest before one passes on is made possible through equity releases. Equity releases have other uses for others as well, but primarily serve the elderly and terminally ill. For more information, check with a lender in your area to see if they support equity releases. - 16747
Equity releases are usually paid back upon one's death, as they are tied to the property of the one applying. Once the applicant has left behind his or her assets, the business who offered the equity release will then take control of the property or other objects in payment for the initial lump sum or periodic payments. This has several definite benefits and drawbacks for the applicant.
The benefits that an equity release offers for descendants is also vast. First, the descendants will be able to enjoy a lesser inheritance tax to pay. Inheritance tax is based on the total value of the inheritance, and without an expensive property to value the tax is much easier to pay. Any leftover money not spent from the sum obtained by the borrower is also made available to descendants in most cases.
Things aren't always on the plus side with an equity release, however. Descendants and relatives who succeed the applicant will inherit less capital or assets as a result. In the same sense, any charities that were to receive money according to a legal will also suffers the same fate. This makes the debate of whether or not to opt for an equity release quite tough, and one which should be discussed with family members before making a decision.
Once one decided to go for an equity release, there comes the problem of obtaining the right flavor. The most common is the lifetime mortgage, which allows borrowers to keep their house and still enjoy a large sum of money in return. Upon death, the borrower then sells the property to make up for the capital given to the lender. This is most popular for the sole reason it allows the home owner to retain ownership rights.
Other flavors of equity releases may include the home reversion, in which up to 100% of the property is sold to a third party. In this case, the borrower can still live in the home but has sold rights to another person or business. In return, the borrower receives regular income or a large lump sum in compensation for the exchange in ownership rights.
In Conclusion
Making a quick sum of money to enjoy life to its fullest before one passes on is made possible through equity releases. Equity releases have other uses for others as well, but primarily serve the elderly and terminally ill. For more information, check with a lender in your area to see if they support equity releases. - 16747
