10 Tips On Equity Release Mortgages
Find out the advantages and disadvantages of an equity release mortgage.
16:05 12 March 2013
When you find yourself facing an unexpected crisis you may need to look no further than your home for assistance. If you have had your home for a while, there should be built-up equity that you are able to borrow against.
Here are a few points of interest to keep in mind while considering equity release mortgage.
- Most providers have a minimum age requirement before they will release equity to you in the form of a loan against your mortgage.
- Borrowing ability is typically based upon the age of the individual with the assumption that there should be more equity in the home.
- There are usually minimum borrowing amounts and maximum borrowing percentages 20per cent to 50per cent depending on age.
- Equity release mortgage can sap the equity in your home, leaving little value to your loved ones if you happen to die or have to move into a housing facility.
- You may not be allowed to pay off the loan because the loan is based off the assumption that your interest will be compounded.
- You may lose your council tax benefit and/or eligibility for pension credit.
- The equity release council tries to ensure that you won’t ever end up paying more than your property is worth even with the compounded interest.
- You may have a variety of choices for obtaining the money from a lump sum, to a type of drawdown scenario.
- You may qualify to receive more money out of an equity release mortgage if you have a shorter life expectancy than the average person.
- If you need to sell your home after an equity release, it may be difficult because of the lack of equity left in the home.
If you need equity release mortgage definitely shop around