Equity Release Re-mortgages
Equity Release Remortgages are Often Called:-
- Lifetime Remortgages
- Home Reversion Plans
The fundamental element of an equity release remortgage is that some or all of the equity (positive capital) in the property is released to the home owner as an income or lump sum.
Equity release home loans or otherwise called equity release mortgages have gained greater popularity in recent years, due to the poor performance of pensions, and related investments.
Equally, the rising house prices caused by the growth of the buy to let mortgage market, has acted as a catalyst for ever increasing house prices throughout the UK. Which of course enables those with a property to benefit from the increase in value and subsequent equity.
If you want to conduct a home equity release, there are certain things you need to keep in mind.
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Speak to an Independent Financial Adviser (FSA Regulated Adviser) to fully understand the process.
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Talk it over with your immediate family; you might be using their inheritance so it is best that you talk it over with them and find out, if they are willing to accept your decision.
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Give yourself the time to make the right decision and ensure that this move meets your current and future needs.
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Don't let some shady equity release company deceive you.
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Read the small print and always seek a second opinion.
How Equity Release Remortgages work
If you have benefited from the recent rise in house prices and possess a good level of equity in the property or have already cleared your mortgage debt in full and require capital, an equity release remortgage may be a suitable option. The equity can be paid to you on a monthly basis or in lump sums. It all depends upon equity release company.
The company that gives you the money for the loan will recover it, by selling the property after the sale of your property which usually occurs after your death.
Advantages of Equity Release Remortgages
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Equity release could provide an lump sum or capital for an emergency
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By releasing the equity in the property, the equity release company can provide an additional income to the owner
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Equity Release Remortgages give long term home owners with small incomes the ability to live a more comfortable life
Disadvantages of Equity Release Remortgages
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The equity in your property is no longer yours
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The home you owned out right is no longer your asset
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Releasing equity from your mortgage will mean that you will be repaying it for longer
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Should you and your partner die, the property will be sold and in many cases there is little or no capital available from the property
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Interest rate payments will increase in the short term due to the increased borrowing, and you will pay more for your mortgage in the long term