As the years go by, our aspirations change, and what was once important to us becomes a relic of the past. Our family’s financial security becomes a priority, and how we get there can be as different as our ideals in life. One of the measures which can be taken to obtain capital that can be reinvested for the well-being of our family is related to equity release. But what does this term mean, and why is it a good idea to use the services of a professional company that can provide you with quality mortgage advice? In the following article, we will try to answer these very questions.
What is Equity Release, and Why is it Important to Me?
In simplified terms, equity release is a way for you to extract capital using the value of your home. It is a process regulated by the Financial Conduct Authority that applies to people who have a property with a market value of over £70,000 and who have reached the age of fifty-five. As a general idea, equity is defined as the difference you get after subtracting what you owe to the lender after you take out a mortgage, compared to the market value of your property, as determined by a third party.
This type of financial arrangement can benefit you, especially if you are an older person who no longer enjoys a substantial stable income but can use the home as collateral. We can understand this type of financial instrument as a form of borrowing utilizing the house’s value, which will be returned to the lender at death. The value of the funds released through this reverse mortgage differs depending on several factors that the lender should specify. Most of the time, however, these are related to the market value of your home, your age, the value you want to release, and how you want to benefit from this amount, namely whether you want the whole sum at once or whether you want it to be transferred to you in regular installments.
Gain Financial Stability and Use Your Funds in Any Way You Desire
Usually, the funds you release through this financial instrument are made available through a lifetime mortgage. The amount you release can pay off your loan repayments and allow you to invest in other ventures you might have wanted to undertake for a long time. Maybe we’re talking about a long-dreamed-of holiday, or perhaps we’re talking about financial help for your grandchildren. A classic car or a new addition to your home. Some unforeseen medical expenses or investing in the business of close friends. The point is, it doesn’t matter what you want to do with your money; all that matters is that it belongs to you, and with the help of a firm that offers you proper mortgage advice, you can invest that money in any way you can imagine.
The popularity of equity releases has skyrocketed in recent years, with an increase of more than 20% in the number of people using this financial instrument in 2021 alone. And rightly so, as the amounts gained from these mortgages represent a number in relation to the increasing value of properties listed on the real estate market. The money raised from these reverse mortgages also has the effect of returning to the UK economy; last year alone, this type of financial instruments generating £1.8 billion in gross value that was later distributed to the market.
Why is it Important to Choose the Best Mortgage Advice?
There are many situations where you might want to take out a mortgage. Perhaps you are a long-term social housing resident who now wants to buy your property through the “Right to buy scheme” or a young couple who wants to buy their first home through the “Help to buy program.” Whichever category you fall into, it would probably be a good idea to seek the professional services of a firm that can give you the most reliable mortgage advice possible.
A professional mortgage advisor can help you with the paperwork required when applying for your preferred loan type. In addition, they have access to an extensive database that is not limited by the offers of a single bank. Perhaps you are a person who is now in the predicament of holding a County Court Judgment in your name for various reasons. In this case, it is very likely to be almost impossible to obtain any credit without the help of a professional firm handling your case. Financial security should be a top priority in any situation, and under any circumstances, you find yourself in.
More Options to Choose from and More Financial Security
The credit conditions you may be offered depend on several factors that are not always up to you. The value of your home or the prospects of advancing in your job can influence the chances of getting the best possible mortgage offer. And these offers can differ substantially from one bank to another. A professional firm can ensure that you get precisely the mortgage advice you need in order to make the best decision for your family. With access to an extensive database, they can compare several financial offers from several separate institutions and can, in some cases, offer you exclusive deals that you would not get by simply visiting your local bank.
Whether we’re talking about properly managing the costs associated with obtaining an equity release or talking about other financial instruments such as buy to let mortgages or shared ownership mortgages, chances are you’re not entirely familiar with the entire process that these financial instruments require. A firm specializing in this area can give you the security and confidence your family needs by providing proper mortgage advice to help direct your time and energy towards other passions or investments. Your financial security is critical and is one of the most controllable things in life if you leave it in the hands of professionals.