Equity Release Schemes have risen to popularity in recent years due to their relative ease and the way that they are geared more toward the needs of senior citizens.  Many financial advisers are recommending these schemes for those seniors who are having trouble making ends meet on a fixed income or who would like to have a bit more financial freedom than they currently have.  This doesn’t mean that Equity Release Schemes are right for everyone, of course; as with any loan, they are a major commitment and should not be entered into lightly.  By learning more about Equity Release Schemes, you can make an education decision as to whether these loans are right for your specific financial needs.

Age Requirement

Equity Release Schemes are only available to individuals who are 55 years of age or older and some plans are only available to those who are over 65 years of age.  They are designed to provide a means of attaining additional financial security and stability for those who are reaching retirement age or who are living on a limited income due to state benefit  payments. Your age will also help to determine the amount that you can borrow and the amount that you will receive each month if you choose to receive monthly payments.

Home Ownership

In order to qualify for an equity release scheme, you must first own your home completely, any mortgage must be cleared as part of the loan.  The value of your home will be the determining factor in the amount that you can borrow with an equity release scheme, since your home’s value is what is being used as collateral to secure the loan.

Payment Considerations

There are two ways that you can receive money from an equity release scheme loan:  you can receive the money as a lump sum payment, or as a continuing monthly payment.  Before taking out an equity release scheme you should stop to consider which of these would be best to meet your financial needs as quite often you cannot change the scheme.

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