Equity Release - Creating finance from a properties value
Equity release is creating finance from the value of property compared to the outstanding mortgage. Equity is the difference between the amount owed on the properties mortgage and the current market value of the property. This equity can be released by re mortgaging which leaves the consumer with finance they can invest or use as they see fit. As with all finance involving the home or property consumers are cautioned to take any and all advise and to be aware of any terms and conditions involved.
Equity Release Example - Equity Release Loans
UK re-mortgaging to free up equity or raise finance against property is a popular choice among homeowners who have seen the value of their properties increase substantially in recent years due to the buoyant housing market. Essentially equity release is a large loan which is secured against a percentage of the customers home. Usually up to 25% of the properties value may be used, and the exact amount borrowed could be dependant on the applicants age. Generally the older the applicant the greater the amount they can borrow. The cash released from this could be used for extensions or improvements that add further value to the property. Equity release is also a good way of helping offspring finance their way on to the property ladder by way of providing the deposit for a UK mortgage.
Equity Release Information
Equity release can also be a way for retired people to access finance or an income against the value of their home via a range of UK equity release schemes.
These schemes include:
- Home reversion schemes
- Mortgage and roll-up plans
- Home income plans
As with all finance involving the home, retired consumers are cautioned to take any and all advise and be aware of any terms and conditions involved, they should also discuss the plans with their children and ensure provision for the loan is placed in to any wills.
Consumers applying for equity release schemes should ensure their policy is guaranteed by SHIP, which comes with assurance that heirs do not pay back more than the properties value.
SHIP stands for safe home income plan, and is a company supported by providers of equity release plans and schemes. The company is dedicated entirely to the protection of policy holders and the promotion of safe home income and equity release plans.