e-r-mThe term equity release implies using the value of your property to obtain cash, either as lump sum cash or as monthly installment cash. Many people have enormous wealth but less cash.

Equity release mortgages are a godsend for senior citizens. They have stored enormous amounts of wealth and property in their long careers. However, this is the time they need cash to pay off their mounting medical bills and many other overhead expenses. Cash assumes greater relevance than wealth. Through equity release mortgage, they can convert some of the equity as cash or income

Home equity is the difference between the market value of your property and the amount of mortgage due. Home forms the bulk of investment that ties up the funds of many people. Equity release mortgages are a great source of releasing this value and reusing it for any other purpose.

Though you can opt for a second mortgage or take additional loan, you need to make extra payments toward this loan. But with an equity release mortgage, you do not have to make any additional payment. It is a simple and easy method of raising cash for your need. The beauty of this type of mortgage is that you can go on living in your house without having to pay any rent for the rest of your life. You need not repay the loan throughout your life and can shift to any other house of your choice

The amount that you get is slightly lesser than the market value of the home. This helps the lender to make up for the loss of rent for a foreseeable period. On your death, they sell off the property and recover their loan. As the property prices keep on escalating, they can easily recover their investment along with the accrued interest

With many senior citizens being deprived of a decent source of income, an equity release mortgage gives them a new lease of life. You can avail of the loan amount either as a lump sum or in installments. If you are old and do not have a regular source of income, you can choose the installments’ option. But if you need the money for any big purpose like going on a vacation or purchasing a car, you can opt for the lump sum payment option. Consult a financial advisor before opting for this mortgage.