Sometimes a homeowner requires access to additional funds. An equity release is one way to access funds without going into too much additional debt. The process is easier than obtaining a mortgage, but a lender still completes their due diligence. This is an extraordinary circumstance so there are restrictions placed on the funds. Plus, you’ll be faced with being asked to provide documentation specific to the use of the funds.
Equity release is also known as a top-up loan. Some lenders offer it as a home reversion or fractional property transaction. If you opt for the top-up loan, you’ll be asked to meet certain requirements and provide documentation.
The loan provides up to 95% of the home’s equity if you show that you can pay it back without fail. Those with a fixed-rate loan might be able to avoid break costs. Be prepared to provide your trusted home loan provider with supporting documentation, such as a contract of sale, payslips, bank statements, or builder contract.
The equity release can fund debt consolidation, a renovation, or purchase a new investment property.
To help the process more smoothly, declare all current liabilities, use a calculator to ensure you’ll be able to afford the repayments, and request only the amount you truly need.
Equity Release Conclusion
An equity release allows a homeowner to access the equity in their home without taking on too much additional debt. There are restrictions placed on the use of these funds since it’s an extraordinary circumstance. Mortgage House works with clients who are interested in this financial solution as a mortgage choice. For more information, contact our lending team.
