| The advantages of equity release being used to | | | | house. |
| raise capital from property have been widely | | | | At this point, it would be advisable to approach an |
| advertised. It is commonly known that their uses | | | | experienced independent equity release adviser |
| have been to enhance retirement lifestyles by | | | | such as Equity Release Supermarket, who can |
| way of home improvements, holidays, debt | | | | source the most suitable scheme available for |
| consolidation etc. | | | | house purchases. |
| However, a further function of this increasing | | | | The adviser will need to make calculations to |
| popular over 55's mortgage is its ability to assist | | | | ascertain exactly how much capital will be |
| with a house purchase. | | | | required, as not only is there the equity shortfall, |
| In essence, an equity release scheme is a | | | | but also whether any additional costs including |
| mortgage secured on ones property; however | | | | solicitors fees, stamp duty, removal costs even |
| unlike a conventional mortgage there are no | | | | home improvements may be required to be |
| monthly payments. Instead, the interest charged | | | | included in the application? |
| by the lender is added to the loan & | | | | A recommendation can then be made as to which |
| compounded over the term. | | | | equity release scheme would offer the best |
| Therefore, similarities between an equity release | | | | terms for the purchase; be it lowest interest rate, |
| scheme & a household mortgage co-exist. | | | | flexibility via drawdown or early repayment |
| Furthermore this similarity extends to the house | | | | charges & taking advantage of any special |
| buying process. | | | | lender offers that are currently available. |
| When funds need to be raised to assist with a | | | | Other factors which need to be considered are |
| house purchase, a conventional mortgage is | | | | whether any existing mortgage needs to be |
| normally utilised to bridge the shortfall between | | | | deducted from the sale proceeds, as this will |
| the purchase price & any deposit already | | | | reduce the equity that can be used as a deposit. |
| held. | | | | Once these calculations & recommendations |
| Equity release can also assist a house purchase | | | | are made, the application can be submitted to the |
| by using exactly the same principles as a | | | | prospective company. |
| mortgage. | | | | The application process is exactly the same as a |
| Experience has shown that as people move | | | | mortgage: -o Valuation carried out by a |
| through their retirement years their health may | | | | independent surveyor appointed by the lendero |
| deteriorate & disability may result. As a | | | | Solicitor instructed to commence legal work |
| consequence, their existing property may become | | | | & enquiries made on behalf of the applicanto |
| less accessible if stairs or even property location | | | | Upon satisfactory valuation, an offer is then made |
| is an unsuitable feature. | | | | by the lendero Upon receipt of the offer, the |
| Aspirational requirements may dictate that a | | | | paperwork is drawn up by the solicitor which is |
| move to a more 'up market' is required. | | | | signed by the client in due courseo Exchange |
| Many reasons for a move in retirement exist. | | | | takes place & completion date set.o On the |
| Upon review therefore, it may be necessary to | | | | day of completion, the solicitor requests funds |
| look for an alternative property which meets the | | | | from the lender & along with the client's |
| new objectives of accessibility, which could either | | | | deposit, transfers the proceeds to the vendor's |
| be buying a bungalow or even moving nearer to | | | | solicitor to complete the legal process & |
| children, who can take more care. | | | | purchase. |
| As the purchase price of a bungalow or new | | | | In summary, an equity release plan can be used |
| house could be more expensive, there may be a | | | | to actually move up market to a more expensive |
| cash shortfall to fulfill the transaction. | | | | or suitable property to meet future retirement |
| Equity release can therefore be applied for on the | | | | needs. |
| new property to bridge the difference between | | | | This could be for disability reasons, live in close |
| the equity available from the sale of the existing | | | | proximity of the children or even aspire to a |
| house & the purchase price of the new | | | | house of your dreams! |