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The issues surrounding pensions in the UK means many people face a considerable drop in income when they retire, with the real prospect of having to downsize to release equity from their homes to help supplement their pensions. However, many retired people who manage on a small pension and limited savings are also living in properties which, even with the recent house prices fall in some parts of the country, have soared in value. This has opened up the market to an alternative known either as Lifetime mortgages or equity release, which many are now finding an effective way of generating readily accessible capital from their home, enabling them to afford the life they want in retirement and do the things they want to do without the need to move.

An equity release scheme could mean the difference between a comfortable retirement and a constant worry about paying the bills. However it is not suitable for everyone, and serious consideration of the following would be recommended before reaching a final decision.

How Lifetime Mortgage Plans Work

All Lifetime mortgages work on the principle that they provide part of your home's value in return for a share of the proceeds when you die, with the proceeds available to use for any purpose such as purchasing a new car, to pay for home improvements or a holiday, or simply to make daily life a little more comfortable.

The equity release in your home can be made available either as a lump sum, or as a monthly release, or a combination of both. Flexible features now make it possible to mix and match product features that satisfy the specific need.

How much you can borrow depends on the value of your home and your age - the older you are, the higher the percentage of your property's value you can borrow. Generally, you will not be advanced more than 50% of the value of the property.

Equity release schemes can be complicated products and are now fully regulated in the UK by the Financial Services Authority, who themselves recommend getting independent financial advice before proceeding with a Lifetime mortgage.

Equity Release Plans - Pros & Cons

Pros

• They can provide a lump sum, a regular income or both.
• Money released is free of tax unless subsequently invested.
• You don't have to move house or sell your home to unlock equity.
• It can be a way of cutting inheritance tax bills as the value of many properties means that IHT is no longer something only the rich have to pay.
• They can be used to pay for care bills without having to sell up at what can be a traumatic time.
• No interest payable while you are alive, so you will get a higher income for the same sized loan than with an interest-only mortgage or home income plan.
• Most loans are fixed-interest, so reducing risk.
• Plans are available to people as young as 55.
• The provider of a lifetime mortgage will be authorised and regulated by the Financial Services Authority.

Cons

• It is impossible to say how much will have to be repaid at the end - and how much will be left for your family.
• Interest payments roll up and compound reducing what your family will inherit. Your family could end up with nothing from the sale proceeds even though the lump sum you were lent only seemed a fairly small proportion of the home's value.
• You may not be able to get a top-up loan later.

Further points to consider when taking out a Lifetime Mortgage are -

• An independent adviser will look at the overall picture, taking into account any effects equity release will have on any means tested benefits and tax allowance as in some cases you could risk losing some or all of it, or having to pay extra tax
• Consider whether funds could be raised affordably from other sources.
• Equity release plans can be a good way of cutting potential inheritance tax bills, but they will also reduce what your family will inherit. Children or other relatives may be prepared to help you out financially instead of you taking out an equity release plan. They could then inherit the whole property.
• Consider whether moving to a less expensive property might be a better way of releasing money tied up in your home.
• Look for plans carrying the SHIP logo. SHIP is an industry body set up to promote safe equity release schemes. Members provide a number of guarantees which includes; The right to live in your property for life, The freedom to move to an alternative property without penalties and a no negative equity guarantee so that you can never owe more than the value of your home.
• You may want to sell your house at a later date and move somewhere smaller, or you may want to sell up completely to move into sheltered housing or into a care home. Check whether the equity release plan being considered allows you to transfer it to a new property or whether there is a redemption penalty if you end the scheme before death.
• Check the costs as schemes are becoming more competitive. A free valuation and a contribution towards the legal fee is not uncommon.
• Check the impact on your tax allowance
• What will happen if the value of your house falls or inflation rises?
• Who will be responsible for maintaining the home?
• The fees and charges for arranging the equity release.
• What will happen if your circumstances change such as remarriage?
• Can others take up residence in the property once an equity release scheme is in place?

Jerry Figueroa-Lee is the co-founder of The Mortgage Warehouse, one of the UK's leading online Mortgage Advisory Services, providing independent advice on the Best Mortgage Rates and Equity Release Schemes from the whole UK mortgage marketplace.

If you are in the market for a used or a new car, then you are reading an article that would prepare you to take the best decision, or at least one that won't make you feel bad the next morning. Houston Craigslist cars is included in the title due to the rapid increase in it's popularity, but even if you are intending to buy through the traditional channels, Houston Craigslist cars is a good tool to provide with an idea of the fair market value for the car.

Whether you are buying through Houston Craigslist cars, or the traditional channels, you will feel only better about your final decision after the completion of this article. Hence, knowledge is Power. The more knowledgeable you are about the deal, the more power you would enact on the salesperson. If you are familiar with numbers involved in the deal, believe me, it would be almost impossible for salespeople to have you pay more than you are supposed to.

Suppose you go to a furniture store, and see a nice couch for $200, later that day you walk into another furniture store, and a salesperson tries to sell you an identical couch for $300. It is in the salespersons' vested interest to sell you the couch for $300, which ultimately means more commission for him or her. Think about the different facts that the salesperson is going to say to you to convince you that their higher price is justified? Will you do it? I hope not, because you saw the exact same couch sitting at the other store for $100 less.

Lets apply this example to car buying. If you were to walk into a car lot with very limited information of what the car should cost, then there is no way you can know if an identical is waiting for you at a different lot, and of course, salespeople will try their best for you not to leave the lot until you make a decision. Never be rushed, if the car is not willing to wait for you for 24 hours, then you were not supposed to buy it. Watch out for salespeople that try to get you excited about the car, this leads to disabling the rational side of your brain. To end this article, it is to your best interest to find out the amount the dealer paid for the car. Allow them to make profit, but not excessive. The price the dealer paid for the car is very easily found by looking up the trade in value of the car on Kelly Blue Book, or the loan value on NADA.
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