Equity Release, A Good Property Investment Financing Option

As the global population density increases and land as a factor of production become unaffordable resource to majority of people, more individuals are finding it more reasonable and even convenient to invest in apartment. Some of the major benefits include relatively low cost of property maintenance and abundance of amenities such as security systems. Although there are varied properties financing options available to apartment buyers such as mortgages, bank loans, personal savings and borrowing from family and friends, equity release is proving a very convenient, affordable and preferred financing option. So, what does equity release entail and what are some of the things that you should take into account when raising money to buy an apartment using equity release?

Equity Release 

Equity release is a financing option where an individual raises money to finance a new property they wish to buy by borrowing against a property they already own. It is important to note that, an individual can only borrow against a property that they have equity in. Other than being low cost, equity release is becoming a popular option for not only those in their retirement age but also, oversea property buyers, who are able to borrow against property they own in their home countries and escape the cost and hassle of taking a mortgage in the new country.

Some of the benefits of equity release include easy access to large sum of money and borrowers are protected against falling prices using the no negative equity guarantee in case of housing market collapse.

Factors To Consider When Applying For Equity Release

Although there are numerous issues you need to deal with before you enjoy the benefits of apartment living, finance is on the top of the list. Although equity release is considered low cost compared to other financing options such as mortgages, it is important for you to ensure you understand all matters relating to finance including cost of buying equity release schemes, valuation charges and interest rates among others. Different schemes vary in charges and interest rates and as a result, you need to select the most affordable and convenient scheme for you.

Other than finance, consider which type of equity release arrangement suits you best depending on your needs and expectations. Some of the arrangements available in the market include lifetime mortgage, interest only, home reversion, shared appreciation mortgage and home income plan.

Since there are numerous equity release schemes provided by different financial providers, it is recommended to seek the services of a qualified and reputable financial consultant. A financial consultant will determine your eligibility and identify the best equity release scheme for you. To find out if you are eligible for equity release, you may click here. With equity release, your dream of owning and enjoying apartment living can become a reality!

More to Read: