Tuesday, 21 August 2012

Equity Releases Increase 22% as Older Homeowners Look to Provide for their Future, report Bower Retirement Services

According to figures just unveiled by the Equity Release Council, advances through equity release are up 22% year-on-year. This growth is largely due to an increase in the number of elderly homeowners taking drawdown lifetime mortgages. These equity release plans accounted for 68% between 2011 and 2012 compared to 32% for lump sum programmes.

Over 65s belong to a generation of homeowners who have benefitted from a buoyant property market that has been increasing in value steadily since the 1960s. According to the Office for National Statistics, over 65s own £765 billion in unmortgaged property assets, which most leave locked up in their homes. However, this money can be used to provide elderly homeowners with a safe and secure future in their own homes so they don’t have to move into permanent long-term care homes. Equity release companies make this possible and have been making it easier for elderly homeowners to realise their dreams of staying in their own home throughout their retirement.

Bower Retirement Services provides advice and information to homeowners looking to release cash from their homes and puts homeowners in touch with reputable equity release firms. It has created an equity release calculator to give homeowners some idea of just how much they can expect to receive through equity release. It recommends elderly homeowners looking to provide for their futures to consider lifetime or drawdown mortgages.

Lifetime with flexible cash release or drawdown mortgages are particularly appealing to elderly people looking to remain in their own homes to see out the rest of their lives. Along with a lump sum, these equity release plans provide homeowners with regular cash payments working in a similar way to an income. The frequency of this cash release along with its duration is specified by homeowners. The amount homeowners receive is awarded as a percentage of the property’s value. Although interest is charged it is not repaid – along with the loan value – until the property is sold.

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