If you are looking into the business of releasing equity from your home or from another of your valuable assets, you will doubtless be keen to determine exactly how much money you will have access to. As with all financial decisions, before you sign up for a scheme, you will need to do a little research and ask yourself some questions. One item to understand is your credit history when it comes to loans.
Factors that Determine Equity Amount
It is important to remember that the amount of equity available to you is not always simply determined by the market value of your house. There are a variety of other factors to consider. To begin with, you will need to consider any existing mortgage that you may have on your home.
Even with clever products such as Prudential increasing cash reserve, you will only be able to release equity to the value of the difference between the market value of your home, and the amount you still owe in mortgage payments. Of course, if your mortgage exceeds your house value then you will not be able to release anything.
In addition, you will need to consider your credit history as well. Lenders will invariably check your record of debt payments and, unless you score well on this test, you may be prevented from accessing equity release schemes altogether.
A few years ago Prudential decided to remove their equity release product from the market. They are not accepting new clients obtaining new lifetime mortgages; however, they are willing to renegotiate products already held by existing customers.
This is where the additional equity release discussion comes into play. You may be able to obtain more equity from Prudential depending on your current product, current home value, and your credit history as it pertains to interest rates and repayment history.
You may find your credit history has improved as you took out the lifetime equity release product and with market changes on interest rates, you can get a better deal providing you with equity still left in the home. It comes down to research and speaking with a representative.
More than Prudential Products
Prudential might have your eye because of a recent news announcement with increased equity release; however, other companies may be willing to offer you a whole new product that benefits you more than the Prudential change over.
It takes looking into current situations to decide what is ultimately best for you. Until you understand what the market is willing to offer, even if you already have a lifetime mortgage, it will be difficult to say what works or what you may want to do.
Calculating Potential Choices
Something that can be difficult is calculating your potential options for releasing more money. Prudential is offering a calculator for this purpose. It is about the only one that will tell you what you may release by having a product already releasing equity.
To truly understand the amount you can potentially receive, it is better to speak with an independent financial adviser. They can use the appraisal from a few years ago when you obtained your Prudential product and see where the market is now.
In this way they can assess your property for appreciation or depreciation determining if there is any possibility of releasing more funds. As it is an independent broker they can contact various companies with your situation, request some assessments and provide you with an answer of whether you can obtain the funds you need.
Finding a Trusted Source
Do not choose just anyone you come across on the Internet. You want to check on their credentials. Are they well versed in equity release products? Do they have contacts to help you get a good deal? Are client reviews pleased with the broker? Do they offer proper credentials in terms of Financial Conduct Authority recognition and are they a part of the Equity Release Council? These are ways to check the person who is helping you out.
Never hire someone you cannot verify. You may find yourself in a difficult position if you do and what you want is more equity released. Always spend some time looking over everything including the basic definitions of products as there may be more options than when you originally released funds.
In short, equity release is by no means the easy option that many people believe it to be. It is, on the contrary, a business fraught with tests, checks and evaluations. So a good credit history and equity situation is paramount to your financial needs.