A
Guide To Releasing Equity From Your Home.
There
are several ways to do this and I have listed below captions for
each method.
If
this is something you are considering it is recommended that you
consult with a qualified advisor to discuss your particular circumstances:
Normal
Mortgage - Most of you will know what this is and how it works but
to recap, you and your property are assessed by a lender on the
security of their investment and they either lend or they don't. Age,
income, property are all big factors in this and of course you have
to make payments every month reducing your monthly budget accordingly.
Investment
Backed Mortgage - Similar to a normal mortgage but instead of taking
out a smaller percentage of the money tied up in the property, more
is released and an investment is secured which should pay the
mortgage and may even provide an additional income source on top.
There are various schemes out there some promising the world but
personally I would look at the safest options and if there is any
extra money left over, great.
Reversion
Scheme - Personally I don't like these. You basically sell your
house to the lender and they accumulate all the future equity in the
house, it is very limiting on what you as a tenant can and cannot do.
Thankfully I am not aware of any reversion schemes currently
available in Spain and they are suitable for only a very few.
Lifetime
Mortgage - A good lifetime mortgage provider will offer a "No
Negative Equity Guarantee" meaning you can never owe more than
your property is worth. Rates should be competitive and get out
clauses minimal. These schemes usually are only available to the over
60's and provide a lump of money to do with as you wish. They are a
lot easier to set up as it is the property that is under assessment
and not income etc. The interest is added to the loan and you don't
have to make monthly payments. A good scheme ensures that the house
remains yours and you are free to sell it at any time should you
decide to.
In
Spain there is no professional requirement for mortgage advisors to
be qualified. Ensure that your advisor is qualified to discuss the
options available as this is a big decision and you need the correct
information and assistance.
