Releasing your equity
In past years, the idea of owning a home abroad may have seemed out of reach for most people. However, over the past few years a growth in your existing property value means that the equity you may have in your current home can provide you with the means to achieve your dream of a Holiday home in the Sun.
Your property is one of the most valuable assets you hold but unlike savings it is not so simple to withdraw some of the cash tied up within the bricks and mortar as and when you require it. Or is this possible?
Firstly the basic answer is YES! Although the process involves a little more than simply pushing a few buttons on a cash machine, it has never been more simple and safer to release. Equity release can be used to help meet the purchase price of your home abroad and combined with the ability to borrow money at very low interest rates makes the reality of a home abroad more than just a dream.
The two methods of releasing cash tied up in your property are Equity Release and Re-Mortgage.
Equity Release
On average a home in the UK back in 1970 cost around £5,000, the same property now costing around £120,000. In today´s lifestyle many people desire and want to improve on the quality of life including within that their home, cars and holidays and even buy a property abroad either to live, or merely as an investment for which they will rent out thus providing an extra income or alternative method of investment ready for their retirement.
Inheritance Tax
The recent rise in property values has given rise to an increased number of beneficiaries liable to this tax which is payable on estates worth in excess of £255,000 (tax year 2003/4).
Equity release creates a debt, therefore reducing the exposure on beneficiaries to this tax.
Re-Mortgage
The other method of releasing funds tied up in your current property is via re-mortgage. This is the more common and known way which is where you have a property valued at, for example, £150,000 and a current mortgage outstanding of £50,000. You would normally be able to borrow up to 85% of the value of the property which in this case would equate to £127,500 providing you with £77,500 available funds.
Some companies will provide you with a re-mortgage for up to 125% of your property value but this would depend on your lender and company back in the UK.
Again, this is something with which Wady Properties can assist you with as we work with a network of trained specialists working both in the UK and here in Tenerife where a simple friendly chat will enable you to establish which method is better suited to your needs and requirements without any obligation or commitment from you.
