St.mark's Mothers Union,Natland.(Answer...
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equity release
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what is it
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Equity release is frighteningly complex, but in simple terms:
Mrs B is 70
She owns her own home with no mortgage
It is worth �200,000
She needs capital, but doesn't want to move home.
She takes out an equity release for �50,000.
She now has her home and �50,000.
This �50,000 is charged to her property, so when she dies, or sells her home, the debt is repaid from the proceeds of the sale.
In the meantime, that �50,000 equity release is charging interest.
Mrs B can either pay this interest monthly or add it to the debt.
In the first option - �50,000 will have to be paid from the proceeds of the house sale, but Mrs B will in effect be paying a mortgage every month.
In the second option, Mrs B will not be paying monthly interest, but when the house is sold x years later - the charge against the property is much, much more than �50,000.
Mrs B is 70
She owns her own home with no mortgage
It is worth �200,000
She needs capital, but doesn't want to move home.
She takes out an equity release for �50,000.
She now has her home and �50,000.
This �50,000 is charged to her property, so when she dies, or sells her home, the debt is repaid from the proceeds of the sale.
In the meantime, that �50,000 equity release is charging interest.
Mrs B can either pay this interest monthly or add it to the debt.
In the first option - �50,000 will have to be paid from the proceeds of the house sale, but Mrs B will in effect be paying a mortgage every month.
In the second option, Mrs B will not be paying monthly interest, but when the house is sold x years later - the charge against the property is much, much more than �50,000.
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