When you decide to apply for an equity release against your home, you will need to go through various plans and schemes before you find the best one for you. Not all plans are created the same so feel free to take your time and really give it plenty of thought. The plan you choose will depend on a number of factors including your financial needs, the value of your home and whether or not your home is fully paid off. If you still need to pay off a part of your initial mortgage, then you will not be able to release as much equity as you could on a home that has a zero balance with the bank.
If you decide that you wish to sell your home but you have already taken out an equity release against that property, you will need to scrutinize the terms and conditions of your agreement. While some plans allow the home owner to sell the property and pay the amount owing, other schemes do not. Upon selling your home, you will need to repay the equity release amount as well as any outstanding amount on your mortgage before you can enjoy whatever remains. For added financial freedom, many homeowners choose to use their released funds to pay off their mortgage. This way, if the home is sold, it is only the equity release that will need to be taken care of and not the mortgage.
There are some release plans that strictly prohibit the sale of your home unless you pass away or need to relocate to a long-term care facility. In many instances, if you wish to sell your home and repay the equity release amount before the minimum term has been reached, you could be liable for penalties. If this applies to your policy, it will be stipulated and detailed in your agreement. This is why you need to go through your agreement with a fine tooth comb and ask all the necessary questions before you sign.
When you first think about applying for any kind of equity release plan, you might not even think about the possibility of wanting to sell your home. Since life has a way of throwing curve balls your way when you least expect it, it is a good idea to prepare yourself for anything and make sure that your plan is as flexible as possible.
Find out more about home reversion plans (http://www.talkequityrelease.co.uk/home-reversion-plans.htm)
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