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Equity Release

Equity Release

How long does it take to remortgage a home

22/02/2017

Remortgaging allows you to recover the money you have been repaying your original mortgage lender by paying off the balance of his mortgage and pocketing the rest of the money. You pay off this balance from the money you get from remortgaging. Because the amount of money you get from remortgaging depends on the value of your house, you will be able to keep part of these funds after repaying the balance the original mortgage. There are many reasons why you may want to remortgage. The big question is how long does it take to remortgage. The more urgently you need the money, the shorter you will want the remortgaging to take.

Be actively involved

The first thing that you need to be clear about is why you need to remortgage in the first place. Your reason for remortgaging will push you into processing the mortgage faster. Most delays in processing remortgages are human. When you do not feel the urgency to process the mortgage faster, you will slacken, and the remortgage will take longer. You must actively follow up everyone involved in remortgaging your home if you need the money sooner. Consider two people, one who want the money to build an annexe and the other who wants to pay school fees. The one who needs the money for building an annexe is not confronted with an emergency. His needs are not as time bound as the one who wants to pay for school fees. He will let the mortgage processing process takes its own course.

Planning Ahead

Remortgaging will take a shorter time if you intend well before starting the process. There are many steps involved in remortgaging. Some of these steps can take quite long to accomplish. They may take even longer if you are not adequately prepared. You must have all documents ready before you start remortgaging. Make sure that everything the parties involved in remortgaging want is ready when they need it. You can only do this by anticipating what will be necessary. You may find it hard to know all documents required from you during remortgaging. If you are doing it for the first time, you can ask a solicitor about the things you need in getting a remortgage.

The Remortgaging process

Remortgaging involves the same step as mortgaging except now you have two loans to process. One of the loans will close, and the other starts. Your current lender will expect you to pay off the balance of his mortgage plus some fees. Some of the fees you will pay to include closure charges, early repayment charge and missed payment fees. Closure or exit fees are paid for when the mortgage terminates. It can be replaced by early repayment charge if the mortgage ends before the prearranged time. Most people who remortgage find themselves paying this fee rather than the closer fee.

The new lender and other people you recruit to help you with remortgaging may affect how long you remortgage. You will need a solicitor during the whole process. Make sure that the solicitor is highly efficient. He must be fully engaged in this duty. You can get such a solicitor by referral or from one of the many solicitor review websites. 

Getting a loan through equity release schemes

20/02/2017

An equity release is when a homeowner uses all or part of his house as a loan security. The owner is given money in return for a share in home ownership. The lender does not occupy the house. He only claims a monetary share of the house which he will reclaim when the house is sold. The house can only be sold when its owner dies or moves to a lifetime home care. Till then, the homeowner is the sole occupant of the house.

Not everyone can qualify for home release schemes. A homeowner must be over 55 years to be eligible for the scheme. He must have little or no mortgage on the property. The loan will be used to pay any balances on mortgages. This way, the lender will not have to pay off pre-existing mortgages upon the sale of the house. Loans given are usually at least £15000. Anything lower than that amount cannot be released. The value of the property also determines your eligibility for equity release loan. Only properties worth more than £75000 are admitted into the scheme.

Types of Equity release schemes

There are two main types of equity release schemes. These two are lifetime mortgage and home reversal mortgage.

Lifetime mortgage scheme

Lifetime mortgages allow you to retain total ownership of your home. You do not have to pay any rent. This is contrary to shared ownership or the home reversal type of equity release scheme. An applicant for a lifetime mortgage must be at least 55 years old. If he is living with a partner, the partner must also be 55 years old.

Different lenders have various ways of handling lifetime mortgages. A lender may allow you to enter into no negative equity guarantee plan. This program ensures you that the loan you take plus accumulated interest will not exceed the value of your property. The advantage is this scheme is that you will be able to pay the mortgage in full from the money made from the sale of the house. You will not be required to pay the balance of the loan from your own pocket. No negative equity prevents the horrors of endowment mortgages that many people in the UK are now putting up with.

Home reversal scheme

The other type of equity release scheme is the home reversal. An individual who enters into the home reversal plan immediately loses ownership of all or part of his house. This share of the house that the original owner loses goes to the lender. The original owner must, therefore, enter into a lease with the lender where he may live rent-free or pay or rent token to the lender if he has to live on the property. If he moves out or dies, the house is then sold and the money used to repay the loan. To qualify for the home reversal plan, you and your partner must be at least 65 years old. The loan issued is equal to or less than the current market value of your property.