The equity release schemes have been considered as one of the major source of income in a retired person’s life. Generally the people over 55 years get some tax free money from their property by using the equity release schemes. The equity release schemes guarantee a steady monthly income to the retired person after their retirement. The schemes also allow the person to receive the amount in two beneficial ways. They either can take the amount in a lump sum or they can opt for profitable monthly installment payment.

The concept of equity release has gained popularity over the last few years. The different equity release schemes help the elder people to deal with difficult situations. The monthly income facility is good way to tackle the crisis situations and to live up to the rising standard of living. The money generated from these schemes helps them to meet the financial needs.

The Equity Release Schemes

Lifetime Mortgages: the lifetime mortgage plan allows the retired person to receive monetary benefits without any initial payment. The plan allows them to live in their house. The lender never owns your house in this scheme. The plan provides the freedom to receive money either in monthly installment or at a time. The rate of interest in this scheme depends on the amount you borrow. If you sell this house then the remaining mortgages have to be paid off.

Home reversion Plan: home reversion plan allows a retired person to sell a portion of his house. Here, he gets the market price of the particular part of the entire house. This plan allows him to live in the house for the rest of his life. If he sells his house then the reversion company will get a percentage of that sell. The percentage will depend on his age and the property value. The remaining mortgages have to be cleared if anyone wishes to purchase this plan.

Home Income Plan: this plan is designed to provide extra monetary benefits to support after retirement lifestyle. The capital provided in this plan can be used in annuities.

Shared Appreciation Mortgage: this equity release plan also allows the owner to stay in the house and enjoy the share of amount on his property. This scheme provides a fixed interest rate.

Interest Only Mortgages: in this scheme, a certain amount of interest is charged on monthly basis on the amount of the assets. If the owner dies, the insurance company takes back the money selling the property.

Author's Bio: 

This content has been contributed by Jerome K Taylor who himself is a financial adviser and writes on behalf of The Right Equity Release, a company that helps you to compare equity release and get the best advises.