Equity Release Is Your Best Available Option For Funding Extensive Home Improvements

Since the credit crunch it has become more and more difficult to obtain mortgage finance. The days of 100 per cent plus mortgages are gone for good and it’s even difficult to obtain a simple remortgage to fund home improvements.

Before the economic crash, this was the way the majority of people would make those long overdue home improvements or luxury holidays, it was simple enough, you’ve paid for your house, now let it pay for you.  In the tough times of 2011, such mortgages are rarer than Faberge eggs.

One way that people approaching retirement can raise cash is to consider a lifetime mortgage, or ‘equity release’ scheme. These schemes allow you to withdraw some of the equity in your home in order to fund home improvements or to pay for larger one off purchases such as a new car.

In return for a share of the proceeds from the eventual sale of your home (normally after your death) a lender will advance part of your home’s value.  The cash ordinarily comes in either a lump sum or as a monthly payment.  It means that you can remain in your home but still benefit from the equity you have built up, although these remortgage deals are typically only available to applicants aged 60 or over.

If you have an equity release mortgage, there are remortgage deals available for equity release, whereby you swap your existing mortgage deal for another, often to obtain a lower rate of interest. By remortgaging, you can also often release additional funds, as maximum lending values are based on age, so if it’s been 10 years since you took your equity release mortgage, chances are you’re now entitles to release further equity.

When you retire, jobs around the house may suddenly be more pressing. You may have been delaying home improvements whilst you were working but now have time to undertake all those repairs and other jobs.

Your property could be improved by simple jobs such as new windows and doors or new guttering or drainpipes.  Home improvements do not always have to be significant or require structural alterations.

For example, simply repainting your home into a more neutral colour or replacing your curtains and carpets can make it more attractive. Having your garden professionally landscaped can create a lovely outdoor area which may also appeal to prospective buyers.

Many people who discover themselves in the predicament described above consider equity release for home improvements in these circumstances – remortgage rates vary. Accessing equity release allows the homeowner to have the works they require completed out by professionals. The equity release will enable the retired homeowner to have no monthly repayments to worry about. This means it is not a drain on the diminished income that the homeowner will now have during retirement.

Seeking specialist advice is recommended before agreeing to any equity release scheme. A financial advisor can outline the various options available to you and they may also be able to establish whether there is any council or government funding available for essential repairs or redecoration required in your home.

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