The best way to Fund the purchase of the New Property Having an Equity Release Scheme

The advantages of ?what is equity release equity release being used to boost capital from residence have been greatly advertised. It is frequently recognized that their employs happen to be to enhance retirement existence by means of dwelling enhancements, holidays, debt consolidation and so forth.

On the other hand, a further operate of the growing well-known over 55's mortgage loan is its ability to guide with a property obtain.

In essence, an equity release plan is actually a property finance loan secured on types property; nevertheless not like a standard house loan there are actually no regular payments. As an alternative, the curiosity billed through the financial institution is extra for the financial loan & compounded in excess of the term.

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

Furthermore this similarity extends to your dwelling buying process.

When funds need to be raised to assist which has a household buy, a conventional property finance loan is normally utilised to bridge the shortfall between the purchase price & any deposit already held.

Fairness release can also help a property order by using exactly the same principles as a property finance loan.

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 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 home 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 acquisition 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 house to bridge the difference between the fairness available from the sale of the existing home & the acquisition price of the new house.

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

The adviser will need to make calculations to ascertain exactly how much funds 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 enhancements may be required to be included in the application?

A recommendation can then be made as to which fairness release 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 financial institution offers that are currently available.

Other factors which need to be considered are whether any existing house loan needs to be deducted from the sale proceeds, as this will reduce the fairness that can be utilized 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 house loan: -

o Valuation carried out by a independent surveyor appointed with 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 via the lender o Upon receipt of the offer, the paperwork is drawn up by the solicitor which is signed via the client in due course o Exchange takes place & completion date set. o On the day of completion, the solicitor requests funds from the financial institution & along with the client's deposit, transfers the proceeds to the vendor's solicitor to complete the legal process & acquire.

In summary, an equity release 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 Launch Awards 2008.

Mark is an experienced Independent Financial Adviser who has now been providing quality equity release 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 fairness release is the right choice for them.