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Thursday, June 10, 2010

New rules to follow for Equity release UK

Supplementary income to ones pension after retirement can be obtained by an Equity release plan or scheme. In many parts of the world and especially in United Kingdom, the Equity release scheme or plan can be considered as an agreement which is sanctioned by a bank as a type of loan against a secured house or property. This loaning system is a bit different from the other loan systems. In Equity release UK, the bank lets the interest amount build up and do not ask the home owner for the repayment of the money on monthly format. The bank allows the home owners to utilize the money which they offer them after they release their home or equity. The loan for the equity release is returned to the bank after the death of the home owners. If any important thing or item is left by the home owners after their death that is returned to their inheritors.

Initially the eligible age to apply for Equity release UK was sixty five but now that has been reduced to fifty five since the UK government realized that people almost start getting old with the approached age of a golden jubilee or half century. This has surely affected the amount of cash that the individuals above the age of fifty five can borrow rather then in the age of sixty five. The reduction in the Equity release schemes have come down to thirty five percent of the total property’s value. Interestingly the reason for reducing the age for being eligible to Equity release UK has been reduced so that the interest amount which is being piled up will be more in these ten even years. There are two main Equity release scheme by which the borrowers can take the money that is, either taking the loan amount at a time or getting it on monthly installment basis.


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