| set aside some of the cash released from the sale of your property to fund the rent. This is probably more attractive whilst interest rates are relatively high and favour savers rather than borrowers. |
Depending on the capital sum released the interest earned may be sufficient to pay the rent. Release equity for retirement with sell and rent back with nil ongoing cost!
Crucially, sell and rent back schemes, rather than traditional equity release products turn you into a saver rather than a borrower. If you are at or close to retirement age, which would you rather be?
Equity release - the options
Conventional equity release products can offer income and/or a lump sum in exchange for a share of the proceeds on the sale of your property when you die.
It's important to realise the calculations are based on your property's value today but the payout will be based on the future value. As a rule of thumb it's also difficult to unlock more than 60% of the current value of your home.
You may already have considered:
Home reversion plans
Selling all or part of your home for a maximum of 60%-65% of its current value in exchange for a lump sum and /or regular income.
Interest only mortgages
You take out an interest only mortgage secured against your property in the usual way. You pay interest each month out of the lump sum.
You take out a mortgage and pay nothing in the meantime. Can provide income and/or a lump sum up to about 50% of the value of your home.
Home income plans
A mortgage is taken out against your property and is used to buy an annuity which provides regular income but no lump sum.
Equity release products are complex...
They need to be scrutinised carefully to fully appreciate their advantages and disadvantages in relation to your own particular set of circumstances.
If you've already rejected that route (or it's rejected you..) then read on to find out more about the alternative option...release equity for retirement with sell and rent back schemes.
Release equity for retirement with sell and rent back - more money in your pocket today
A sell and rent back scheme in complete contrast, is a very simple arrangement.
The main attraction of deciding to release equity for retirement by selling your home and renting it back is that you get a far higher percentage of the value of your home's current worth. More money in your pocket today.
The major downside is that you will become tenants of your former home. In addition some of the capital released by the sale will have to be set aside to pay future rent.
However, the option to release equity for retirement with sell and rent back schemes is open to a much wider group of people than conventional equity release products.
Release equity for retirement with sell and rent back
If you're just keen to explore how a sell and rent back scheme might work for you or are already shopping around for a solution the following points may be helpful to you in your research.
1. With a sell and rent back scheme you become a tenant. You must consider in advance how you really feel about this change. Will the ability to release equity for retirement with sell and rent back, be sufficient to off-set this negative?
2. Are you looking to live permanently in your current home or for a fixed number of years? Make your preference very clear to any companies you approach.
| 3. To what extent will your house continue to feel like home? For many homeowners this is a major barrier. But we know if you release equity for retirement with sell and rent back your house can still feel like home. But it will always come back to what you're comfortable with. |
4. What level of rent (if any) are you prepared to pay? What would you find affordable? You're better making this clear at the outset, even if not asked. This is a characteristic feature of opting to release equity with sell and rent back schemes.
5. You're generally no better off going with a large or small company but either way it should be a professional cash property buyer like Sell Your House Quick Help, with a reputation to protect. Amateur buy to let investors are best avoided. Smaller operators may be more flexible in their outlook.
6. Don't rush into any sell and rent scheme (or equity release product). As with any life-changing decision, it pays to do your homework. Take your time, ask lots of questions. It's important to get a tailored plan suited to your specific needs if you're opting to release equity for retirement with sell and rent back. You will get offered varying rent/price levels so it's worth shopping around for the right scheme and the right professional cash property buyer for you.
There are many options for releasing equity to help fund your retirement. Today fewer homeowners feel under the same pressure to leave their home to their children. And many prefer to leave cash in any case. Opting to release equity for retirement with a sell and rent back scheme is a good value alternative for some homeowners.
To find out more about how we can help you release equity for retirement with sell and rent back go here for more information and help.