Have you ever heard of an equity release before? This pertains to the mortgage industry. If you have a home that is free and clear or has very little owed to it, you can release this equity in the form of a home loan. These are often advertised as what is called reverse mortgages. Instead of you paying a mortgage for a home that you do not own, you are simply using the equity that you have built up in a house that is likely free and clear. Navigate here to know the process of how this works, and why this might be the most advantageous idea that you can use in your retirement years.
How Do These Equity Release Options Work?
You will sit down with a mortgage broker that will officially determine the value of your home. They will then find out if you have any liens or mortgages, that is on the property itself. If it is free and clear, they can simply use the figure that was provided by the home assessor. It is from that figure, and also your monthly income, that they will determine if you can do an equity release.
How Long Do They Take To Initiate?
If you have found a business that is willing to work with you right away, you can have everything set up in a matter of days. There are not as many forms to fill out as when you purchase a property, but you still have to complete the paperwork for it to be legal and binding. For those that have not used these before, they may seem a little bit complex. It is really nothing different than taking out a cash loan, or perhaps an advance from your credit card. The equity is there, and you are simply using that equity in the form of a loan that you will be making small payments on.
How Long Do These Equity Release Loans Last?
These equity release mortgage are going to last a similar amount of time to a regular mortgage or refinance loan. They can be 15 years, but they are usually shorter. It has to do with the type of loan that you are getting, and the purpose of that loan. If you are retiring, you obviously don’t want to be making payments for the next 30 years just because you have utilized your equity.
The home equity loans that you have taken out before are very similar to equity release options. You are doing nothing more than using the equity that has been built up into the home. This allows you to free up cash that is yours, and do what you need to with your life. If you are retired, this is one of the best ways to take advantage of all of the hard work you have put into your home for the last 20 or 30 years. This is why so many people will invest in real estate, and have renters pay off the mortgage for them, so they will have sizable and numerous nest eggs that they can use for their retirement.