The way to Fund the acquisition of the New Residence Having an Equity Launch Plan

The benefits of ?remortgage to release equity fairness release being used to lift cash from property have been greatly advertised. It really is normally known that their employs are actually to boost retirement life through property enhancements, holiday seasons, credit card debt consolidation and many others.

Even so, a further function of this escalating well-liked about 55's home finance loan is its ability to aid that has a property invest in.

In essence, an fairness release scheme is really a house loan secured on kinds home; even so not like a standard home finance loan you will discover no regular monthly payments. Instead, the curiosity billed because of the lender is added on the personal loan & compounded in excess of the term.

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

Furthermore this similarity extends to your home buying process.

When funds need to be raised to assist using a home obtain, a traditional mortgage is normally utilised to bridge the shortfall between the acquisition price & any deposit already held.

Equity release can also help a household order by using exactly the same principles as a mortgage.

Experience has shown that as people move through their retirement years their health may deteriorate & disability may result. As a consequence, their existing property may become less accessible if stairs or even assets 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 house 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 a bungalow or new dwelling could be more expensive, there may be a cash shortfall to fulfill the transaction.

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

At this point, it would be advisable to approach an experienced independent fairness launch adviser such as Equity Release Supermarket, who can source the most suitable scheme available for dwelling purchases.

The adviser will need to make calculations to ascertain exactly how much capital will be required, as not only is there the equity 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 equity release plan would offer the best terms for the purchase; be it lowest interest rate, flexibility via drawdown or early repayment charges & taking advantage of any special financial institution offers that are currently available.

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

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

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

o Valuation carried out by a independent surveyor appointed because of the loan provider o Solicitor instructed to commence legal work & enquiries made on behalf of the applicant o Upon satisfactory valuation, an offer is then made because of the loan company o Upon receipt of the offer, the paperwork is drawn up because of the solicitor which is signed because of 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 provider & along with the client's deposit, transfers the proceeds to your vendor's solicitor to complete the legal process & buy.

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

This could be for disability reasons, live in close proximity of the children or even aspire to a home 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 over 55's decide whether fairness launch is the right choice for them.