Four little known truths about equity release
Truth #1 – Equity release isn’t just for releasing cash from your main residence
Some people mistakenly think you can only use equity release on your main residence. A number of websites with equity release information are presenting this as a fact.
The truth is, if you are lucky enough to own another property you may be able to unlock some of your tax-free money from it with equity release. It could be a perfect alternative to selling the property or arranging a remortgage.
As with all other equity release plans, the money you release from the property is entirely tax-free and yours to spend however you wish. If you have an outstanding mortgage on that property, then it is a condition of equity release that you clear it with the money you receive.
Specialist second home lifetime mortgages, and buy-to-let lifetime mortgages are available. Through Equity Release Wise you can explore your options to get the most suitable product and best deal.
Truth #2 – You can use equity release to buy another property
Have you ever found yourself dreaming of a little getaway by the coast? Or perhaps you fancy branching out into the rental sector?
The good news is that as well as releasing cash from a second home or buy-to-let property, you may also be able to fund a purchase through equity release.
One example is unlocking a cash lump sum from your main home to put down a deposit on another property, or buy it outright. Another option is to arrange equity release on a property you want to buy in order to complete the purchase.
These options exist because of the increasingly flexible nature of equity release plans on the market. Our selected equity release advisers can help you understand what’s available and help secure a suitable product. Call us on 0800 096 2215 or request a call back for a time that is convenient to you to arrange an initial appointment with an expert.
Truth #3 – Having bad credit history won’t usually stop you from being approved
Many people consider equity release as a way to get on top of their finances and pay off mounting loans and credit card bills. But if previous debts have led to you having a poor credit history, you might worry that you won’t be eligible. The good news is that simply having a poor credit history is unlikely to affect your eligibility.
As there are no mandatory monthly repayments with equity release, you don’t have to prove your income. That’s why having a poor credit history won’t usually be an issue, although you may find that during your application your lender insists that:
- You use some of your equity release cash to pay off any secured loan arrears.
- You pay off other debts such as credit card debt from your equity release money so creditors do not process a claim via the courts.
- You repay debts related to any County Court Judgements (CCJs) with the money you release, or before your equity release money is released.
- You settle an outstanding Individual Voluntary Arrangement. Your lender will specify whether you need to do this before applying, or once your plan has completed and you have received your money.
Truth #4 – You could access a better equity release deal if you have a health condition
The last of our ‘4 little known truths about equity release’ is one that may not be ‘little known’ for much longer as more and more people are finding out about it.
A special type of equity release is for those living with certain health conditions or lifestyle choices. An enhanced lifetime mortgage could see you achieving a lower interest rate fixed for life, a higher cash release amount, or both.
Common qualifying health conditions include high blood pressure, high cholesterol and diabetes. Many other conditions could also entitle you to the lowest rates. They include a history of cancer, heart attacks or having a very high or low body mass index (BMI). Even being a smoker now or in the past could see you qualify
Not all lenders offer enhanced terms, so some advisers may not automatically check your eligibility. But at Equity Release Wise we don’t want anybody to miss out. To find out if you qualify for enhanced terms, contact us and our selected advisers will look into your eligibility.