Asset-rich but cash-poor homeowners are getting help in the form of a new publication from the Counc...
Asset-rich but cash-poor homeowners are getting help in the form of a new publication from the Council of Mortgage Lenders, which aims to help consumers understand how to unlock the value of their property.
Equity release is commonly used by older homeowners who have paid of or are close to paying off their mortgage. The value of a home can be released to provide a lump sum or regular income which is repaid to lenders when the house is sold or the owner dies.
The guide, "Unlocking the value of your home: A guide to equity release", has a Plain English crystal mark and aims to explain clearly how the various types of equity release schemes work.
It describes the different ways of releasing equity, suggest questions consumers should consider and answers an extensive list of frequently asked questions.
The CML says an ageing population of homeowners, greater reliance on self-provision and shrinking of the welfare state all mean that equity release will inevitably become a serious option for homeowners.
Equity release currently accounts for about £1bn of outstanding mortgage lending. Most conservative estimates put the potential size of the market at £50 billion, but the CML suggests a more realistic estimate would be £100bn, which represents significant growth potential.
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