Equity is the difference between the size of your current mortgage and the value of your home.
So, for example, if your house is worth £150,000 and you have a mortgage of £75,000 that means you have £75,000 of equity in your property. With the rising house prices of recent years, you might have more equity in your property than you think.
Great! But what can you do with this money? The answer is pretty much anything you like, but first you need to get your hands on this equity by means of an equity release remortgage.
An equity release remortgage allows you to unlock some or all of the equity that is tied up in your home, and use this extra cash for pretty much any purpose.
People typically use the equity they release from their property for things like: home improvements, a new car, a dream holiday, clearing credit card and loan debts, a wedding, or to give them a deposit to buy a second home either here in the UK or overseas.
To release the equity in your home, you will need to arrange a remortgage. This means taking out a new mortgage for a greater amount than your current mortgage. So, using the figures in our earlier example, you might decide you need £25,000 to build an extension. All you have to do is take out a new mortgage for £100,000. Of this, £25,000 is used for your extension and the remaining £75,000 is used to clear your original mortgage.
If you havenít reviewed your mortgage arrangements for a while, there is a good chance you may end up remortgaging to a lower interest rate than you are on at the moment. So not only will you be raising additional cash, but you might end up with lower monthly repayments as well, especially if you are using the equity to consolidate existing high interest credit card and loan debts.
To find out about releasing equity from your home, just fill in our no-obligation enquiry form and we will arrange for a qualified mortgage specialist to contact you to see if they can help you raise extra cash from your home.