How does Equity Release in York work?
The longer that you’ve had a mortgage, the more equity you are likely to have in your home. Did you know that it’s possible to release a percentage of this equity and turn it into a lump sum of cash?
This lump sum can be used for various things. You could use it to pay off an existing mortgage payment, pay off unsecured debts, improve your home or even go on holiday or pay off a car loan. The possibilities are endless; you can spend the money however you want to.
As a Mortgage Broker in York, we’ve seen that later life applicants usually choose to Release Equity through a Lifetime Mortgage.
You will have the opportunity to Release Equity through a Lifetime Mortgage generally when you are coming to the end of your mortgage term. If you choose to take the Lifetime Mortgage route, you’ll get the choice of whether or not you want to dedicate a percentage of your equity for future family inheritance.
After you’ve taken out a Lifetime Mortgage, you will get the choice to pay back the interest on the mortgage or simply let the interest roll up. Paying back the interest on the Lifetime Mortgage will mean that you owe the same amount that you borrowed when you die, meaning that your family will inherit more of the property than if you were to let the interest roll up.
When you choose to leave the interest to roll up, there will be less equity left in the property; should you die or move into long term care the lender will own the house. This may sound like the worse option of the two, however, letting your interest roll up will not cost you anything, you’ll receive your lump sum at the point that you took out the Lifetime Mortgage and will have no more payments to meet.
Whichever option is most beneficial for your personal and financial situation you should choose.
Things to Remember with Equity Release
There are various criteria to meet before qualifying for a Lifetime Mortgage. For example, you will have to be living in the property that you are releasing equity from (your main residence) and you will also have to be at least 55 years of age. The amount of equity that you can release on your home will depend on the property’s value and your age.
Furthermore, for expert Equity Release Mortgage Advice in York, please get in touch with our fantastic team.
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