How to Fund the acquisition of a New Property Having an Fairness Launch Scheme

Some great benefits of ?click resources equity launch getting used to boost capital from residence have already been commonly advertised. It really is commonly recognised that their takes advantage of have been to enhance retirement life through residence improvements, holiday seasons, financial debt consolidation and many others.

On the other hand, a further purpose of this growing well-liked above 55's property finance loan is its ability to aid having a dwelling invest in.

In essence, an equity release scheme is really a property finance loan secured on kinds property; nonetheless not like a conventional mortgage loan you will discover no every month payments. As an alternative, the desire billed via the loan provider is extra for the bank loan & compounded around the term.

Therefore, similarities between an equity launch plan & a household mortgage loan co-exist.

Furthermore this similarity extends towards the home buying process.

When funds need to be raised to assist having a property invest in, a conventional mortgage loan is normally utilised to bridge the shortfall between the purchase price & any deposit already held.

Equity launch can also assist a house purchase by using exactly the same principles as a mortgage loan.

Experience has shown that as people move through their retirement years their health may deteriorate & disability may result. As a consequence, their existing home may become less accessible if stairs or even property location is an unsuitable feature. Aspirational requirements may dictate that a move to a more 'up market' is required.

Many reasons for a move in retirement exist.

Upon review therefore, it may be necessary to look for an alternative property which meets the new objectives of accessibility, which could either be buying a bungalow or even moving nearer to children, who can take more care. As the purchase price of the bungalow or new residence could be more expensive, there may be a cash shortfall to fulfill the transaction.

Fairness launch can therefore be applied for on the new home to bridge the difference between the equity available from the sale of the existing dwelling & the acquisition price of the new property.

At this point, it would be advisable to approach an experienced independent equity release adviser such as Fairness Release Supermarket, who can source the most suitable plan available for property purchases.

The adviser will need to make calculations to ascertain exactly how much money will be required, as not only is there the fairness shortfall, but also whether any additional costs including solicitors fees, stamp duty, removal costs even house improvements may be required to be included in the application?

A recommendation can then be made as to which fairness launch plan would offer the best terms for the acquisition; be it lowest curiosity rate, flexibility via drawdown or early repayment charges & taking advantage of any special loan provider offers that are currently available.

Other factors which need to be considered are whether any existing property finance loan needs to be deducted from the sale proceeds, as this will reduce the fairness that can be utilised as a deposit.

Once these calculations & recommendations are made, the application can be submitted on the prospective company.

The application process is exactly the same as a property finance loan: -

o Valuation carried out by a independent surveyor appointed by the financial institution o Solicitor instructed to commence legal work & enquiries made on behalf of the applicant o Upon satisfactory valuation, an offer is then made by the loan provider o Upon receipt of the offer, the paperwork is drawn up by the solicitor which is signed by the client in due course o Exchange takes place & completion date set. o On the day of completion, the solicitor requests funds from the loan company & along with the client's deposit, transfers the proceeds on the vendor's solicitor to complete the legal process & invest in.

In summary, an equity launch plan can be used to actually move up market to a more expensive or suitable house to meet future retirement needs.

This could be for disability reasons, live in close proximity of the children or even aspire to a house of your dreams!

Mark Greggs is the founder of Fairness Release Supermarket who were recently accredited 'Best Financial Advisers' at the Equity Release Awards 2008.

Mark is an experienced Independent Financial Adviser who has now been providing quality fairness launch advice for the past 9 years. Gained with this experience is exclusivity to deals with some of the UK's leading financial providers. Mark aims to pass on his experience in assisting the in excess of 55's decide whether equity launch is the right choice for them.