Many people want to opt for the safe haven of equity release schemes after their retirement because they want to make use of the money that has been invested in the property. It is important to carry on some research before embarking on a particular equity release scheme, as the variety of schemes might baffle you initially. In order to get a thorough outlook, it is necessary to compare equity release schemes.

This type of research can also be done with the help of many videos that are posted on the websites of companies dealing with equity release schemes. Basically there are three popular types of schemes that can be availed for equity release, and by comparing all the aspects of these schemes you can easily select a plan which will match your criteria.

Lifetime mortgage, drawdown lifetime mortgage, and home reversion plans form the crux of equity release schemes. Lifetime mortgage helps people to take a loan and their homes pose as security for the lenders. Drawdown lifetime mortgage is another type of lifetime mortgage, wherein the total amount of equity that can be released is estimated and then the home owner decides to take the amount in instalments whenever he requires the money. This scheme is quite popular as it helps in keeping the interest amount from burgeoning into a large amount.

Home reversion plans allow people to sell a fraction of their house so that they can get a lump sum amount. It is extremely important to compare the providers for equity release and also the nature of the schemes that are offered by them, so that you can gauge the most viable scheme from the entire lot.

Comparing the Three Plans

Lifetime Mortgage
• Awarded to anyone 55 or over
• Requires full payment at death or when you decide to go to a long term facility for care
• Accrues interest during the life of the loan
• You still own your home

Drawdown Lifetime Mortgage
• Age 55
• Full payment after death or move to a new place
• Interest accrued only on the portion of equity you released, rather than the full amount available in your equity account
• You still retain ownership of your home

Home Reversion
• You sell all or part of your home
• You have a lifetime tenancy agreement that stipulates a rent free stay for your lifetime and that of any family on the tenancy and equity release contract
• You must be 65 years of age or older
• You do not owe any money after death or move to a long term facility

As you can see there are key differences to the plans, which is why you should compare equity release schemes for the basic information before getting into the more detailed terms. For example, one provider may offer a better interest rate on drawdown mortgages than another.

You should also be aware that there are other lifetime mortgages besides the two mentioned. They are very specific and sometimes less appealing to consumers. Even though they may not be as popular for a select few, they can be quite helpful.

Interest Only Lifetime Mortgages
In this type of lifetime mortgage you still owe the principle balance at your death or move to a long term care facility. The difference is that you do not owe the interest at this time. Instead of letting the interest compound for a lifetime you make monthly payments. This pays off any interest that has accrued for the month and thus for the entire year under the annual percentage rate you are given. It makes it easier on your family should they need to pay a lump sum to save the family home. The key is to have money that can go towards the payments, which is rare in retirement.

Enhanced Lifetime Mortgage
This is a very special mortgage based on your life expectancy due to an illness. Someone may be very ill or have a condition that naturally lowers their life expectancy. If this is the case you can release a larger lump sum during your lifetime and retirement in order to enjoy it.

Many people often do not give much of a thought to the equity release providers but this habit should be curbed and the providers should be chosen only after assessing the other players in the market. It is not necessary that a particular equity release scheme would be appropriate for everybody as the requirements of the clients tend to vary. Proper research of equity release schemes would make the process of selecting a plan less cumbersome, hence compare equity release schemes.