Reverse Mortgage or Equity Release Loan – what is it?

If you have retired, a Reverse Mortgage or Equity Release Loan allows you to unlock the equity in your home.
It is simply a loan against the value of your home that gives you a lump sum, a line-of-credit or can be paid in regular installments.
No monthly repayments with a Reverse Mortgage Unlike traditional Mortgages, with a Reverse Mortgage you do not make regular loan repayments.
This suits many retirees because they have a reduced income.

No need to sell with a Reverse Mortgage.
The advantage of Reverse Mortgages or Equity Release Loans is that you can access the equity in your home without having to sell your property.
You can turn the equity into cash while you remain living in your own home.
When do repayments start?
The Lender will only seek repayment on a Reverse Mortgage when you vacate the property.
Then the borrower or the estate will then repay the Lender in a lump sum or from the proceeds of the property’s sale.
No Negative Equity Guarantee
In seeking a Reverse Mortgage or Equity Release Loan, look for a Lender which has a no negative equity guarantee.
This ensures the full repayment will not exceed the value of the home.
It also means you will be able to live in the property for as long as you choose.
Equity Release Loans or Reverse Mortgages are specialist products and should be carefully considered.
This type of solution may or may not be the right choice for your particular situation and you should always seek legal advice before making a decision.

Equity Loans

This type of loan allows a homeowner to borrow against the accumulated equity in his or her home using the property to secure the debt.
These loans provide access to funds when required, up to the limit set.
The loan may be for a variety of purposes.
The amount that the bank might loan could be determined by the fair market value of the property minus any current mortgages secured by the property, subject to the owner’s other debt commitments and credit history.
You can calculate the equity in your home by taking the value of your home and subtracting out the amount you still owe on the mortgage.