With the increasing high cost of buying a new home, many homeowners are deciding to upgrade, remodel and improve their existing place of residence. Home improvements, however, are still expensive and can cost you an arm and a leg, especially if you haven’t been saving.
One way people are funding their home improvement projects is by releasing equity from their home.
Did you know that homeowners over the age of 55 can release tax-free cash from their home? This money can then be used to pay for home improvements.
This blog post aims to explain what equity is and how you can release it for your home improvement project.
What is equity?
Simply put, home equity is the percentage of the property that you, as the homeowner, really own. When considering releasing equity from your home, you should consider talking to a professional, as this is something you shouldn’t do on a mere whim.
Equity release refers to releasing the value of your property.
How to release equity
There are different types of equity release, this includes interest only lifetime mortgage, lifetime mortgage, retirement mortgage and home reversion plans.
Only lifetime mortgage refers to you borrowing money against your home, and then you have to pay it back monthly. A lifetime mortgage is similar, however, you pay it back as interest that is added to your mortgage.
Retirement mortgage is only paid back when your property is sold, whereas, home reversion plans means you sell your home and stay living at the property, rent-free.
We always advise that you talk to a professional before releasing equity as there are a whole host of factors to consider. Make sure it is right for you before you make the decision.
If you have any further questions about equity, you can reach out to Castle Home Improvements today and we will do our best to help you. A member of our team is always on hand to help you with any questions or queries you may have.