Learn About Home Equity

Is this your first home equity loan? Before you apply, learn the essentials of using your home to finance major purchases and expenses.

Equity Release

More and more older people these days are asset-rich but cash-poor, as the bulk of their wealth is tied up in their property. Equity release schemes allow you to access some of that equity as cash or income. You can opt for a lifetime mortgage or a reversion scheme. A lifetime mortgage gives you a lump sum now or an income for life, via a loan secured on your home. Interest is charged, but is accumulated over time and not repayable you die or go into long-term care, when the home is sold. When this happens the capital and interest are both paid off by the money raised from the sale, in one go. With a reversion scheme, you sell part or all of your property in return for a cash lump sum or income.

Top 3 Reasons to Use Home Equity Release Schemes

Whatever you need money for, you can benefit from the low interest rates and potential tax advantages1 of home equity lines of credit and loans. The three most popular uses of home equity accounts are to finance home improvements, consolidate bills, and make big purchases.

Home improvements

Many UK homeowners access their home equity to pay for remodels and other home improvements — everything from a new kitchen or bathroom to a series of repairs and upgrades.

Consolidate bills

You can also use your home equity to combine all of your high-interest bills into a single, more manageable monthly payment. You can increase your cash flow by lowering your monthly payment and — since it’s easier to keep track of just one bill — more effectively manage your finances.

If you’re paying high interest rates on outstanding balances, consolidating your bills with a lower-rate home equity line of credit or loan could significantly reduce the amount of interest you pay over time.

Big purchases or expenses

Lower rates and potentially tax-deductible interest can make home equity financing a less expensive option than a traditional loan. So a home equity line of credit or loan is also a good way to finance large purchases or expenses such as:

• A new car

• College tuition or other education expenses

• Medical expenses

• A life event (wedding, baby, retirement)

• Taxes

• Investment opportunities

Home A Loan
Demand for secured loans declines as house market slows down, as well bankruptcies and home repossessions rising

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