In plain words, a home income plan can help you receive a lump sum which you can then use for your needs. You might wonder what amount are you eligible to borrow if you use a home income plan. Well, the older you are the higher the “reward”. If you are well over 65 of age, then you can borrow as much as 60% of the real value of your home, while if you are below that age, don’t expect more then 20%. So, it is obvious that if you are still under the age of 65 making such a choice will not be a positive step at all.
This kind of lifetime mortgage has some advantages but disadvantages as well, that is why it is fully recommended that you ask an expert before proceeding with the loan. Make sure that you are aware of the interest rates, or about all the other extra fees that might be applicable, and also many times there is a penalty fee you have to pay. This penalty fee means that if you decide to repay your loan earlier because you have the necessary funds and you want to get rid of the debt, you also have to pay extra for that.
It is important to be precautious in general, after all you might have worked very long years to afford yourself that home, so don’t let its value be chunked and most of all avoid exposing your home to any sort of risks. Cash is something which always sounds inviting, and because advertising in general makes it sound the easiest for you and says that all you need to do for a lot of cash is to let the value of your home transform into cash, don’t let yourself easily influenced.