Equity Release Mortgages

Many homeowners are literally living in their greatest investment. While we all know that our homes represent a long-term investment of our money, you may not realize that some of that money is available to you while you still live in your home. Equity release mortgages allow you to tap into the equity you have stored up in your home and take it out as a lump sum.

Why You May Need Equity Release Mortgages

There are a variety of reasons why you may want to benefit from equity release mortgages. Perhaps you need to do a major renovation on your home, or perhaps you wish to take a long-awaited vacation. Maybe you have an unexpected emergency in your family. These mortgages are sometimes used to finance lifestyle changes. Regardless of the reason, if you have a lot of equity built up in your home, either due to your monthly payments or the rising home values in your area, you can use that money.

How They Work

Equity release mortgage allow you to borrow up to 95% of the value in your home in one lump sum. You will then pay the money back like you do your traditional mortgage. Because this is a secured loan, secured by your home, you will have a lower interest rate with this type of loan than you would with another person loan.

A Word of Caution

Equity release mortgages are not regulated by the government. For this reason, you need to use caution when shopping for this type of loan to avoid being scammed.

First, make sure that any mortgage you agree to has a negative equity guarantee. This will protect you from ending up upside down in the mortgage if property values begin to drop. Also, make sure that you are not signing away any ownership rights to your home.

Another thing to watch for with equity release mortgages is any stipulation that will keep you from moving home if you want. You should be able to move home and keep up the monthly payments if you choose this type of mortgage. Also, keep your eyes open for hidden fees, such as property survey fees and legal charges.

Equity release mortgages are excellent tools to use when you need some extra cash. However, because these mortgages are not regulated, it is best to get the advice of a mortgage specialist before signing up for one. This will protect you from fraud and scams and help you get the money you need safely and securely.