Many homeowners do not understand certain terms that they need to know when they own their own home. By understanding what the terms mean, they could save themselves a lot of money. One of these terms is equity release. An equity release plan allows a homeowner to release cash from there home in order to use it any way that they want to. The reason that an equity release plan is so important is that it is tax free.

One of the equity release questions that homeowners frequently ask about is what is a lifetime mortgage ? A lifetime mortgage allows homeowners to release a tax-free cash lump sum from the equity tied up in their home. The amount of equity that has built up over the years can be borrowed back. This is a good option for an elderly couple who does not have much income coming into there home on a monthly basis.

The money does not have to repaid back at all. In fact, once the homeowners die or go into a long term care facility, the loan on the home is paid in full at that point. The good thing about a lifetime mortgage is that you can live in your home as long as you and your spouse are alive.

The money that you take out on the property will have interest placed on it, but your monthly payments (if selected) will not increase. If your home is paid for, then the interest will just sit there until you pass away or move out of your home for a year. In fact, if you happen to sell your home before you pass away, the interest will be included in the sale price.

An elderly couple may not have benefited from working all of there lives, but they can get it back from the equity in there home. Since they now know what a lifetime mortgage is, they can get started in getting the tax free cash they need and deserve. While they are still alive and in there home, they can have a steady flow of cash coming in which can be made available by one of the more flexible equity release plans called a drawdown equity release plan.