Many people dream of being a homeowner. With the current financial situation, and with increasing estate prices, it’s challenging to be one. This guide will help you calculate how possible it is to get a holiday home or a second home.
People who own a second home are considered part of the lucky few. You can also get an equity release scheme on the property to get a little extra cash for that dream vacation to the Bahamas. You can also release some money for home improvements and such.
The lifetime mortgage plan is specifically helping holiday homeowners gain access to the equity that’s locked up in that second home. So, if you’re hesitant as a homeowner about a mortgage plan on your main home, you might want to look at taking out an equity release plan on your second residence as an alternative.
Let me tell you:
Other lifetime mortgage plans1 let you release cash from your holiday home tax-free. What’s great is that you can use that released funds on anything you want to. The lifetime mortgage plan requires you to repay it in full when you die or need constant medical care.
It’s indeed so much easier to release cash from your main home than to remove some money from your second home or holiday property, there are multiple options you can choose from. You have a variety of plans to take out to make your dreams come true.
So what now…
However, if you want to make sure that your family will get an inheritance, this mortgage plan is an ideal option. With this plan you don’t have to worry about your main home, it won’t be affected. You can see what amount of cash you can get through this mortgage plan. Here’s how to calculate that amount with the Second Home Calculator.
How Does The Second Home Calculator Work?
Simply put, to calculate the maximum amount of cash you could get from a second home lifetime mortgage, input:
- Your property’s value should be a minimum of £70,000, and that property needs to be in the UK.
- The age of the youngest homeowner which should be a minimum of 55 years.
- Your property is located, the Equity Release Council requires that your estate is in England, Scotland, or Wales.
These are the requirements most mortgage providers have. They need this information to work out how much money you can borrow from them, i.e. how much capital is locked up in your property.
Let me tell you something…
People who have a second home are considered the most achieved people on earth. It’s a luxury to have somewhere to escape to when you want to get away from your primary residence and your routine. Therefore, if you’re curious to see how much money you can get if you take out a second home mortgage, use this simple holiday home or second home calculator to determine what amount you qualify for. It’s so easy!
You might be unsure about the whole process…
The Equity Release Process
Certain factors will ultimately affect your equity release process’s time scale, placing a delay on your application and hindering a timeous release of monies.
Naturally, you will want to allow your application to progress as timeously as possible. What factors, and how do you ensure your application for equity release moves as fast as possible? What are these core factors?
The core factors that will affect your equity release process are:
- Type Of Property
Some equity release providers or lenders have specifications about your property. Some might deny an equity release plan if your property has a flat roof, for example, or if it’s in a high-flood area.
Some might even have a problem with where the property is situated, for example, if it’s close to a commercial property or construction built according to the right standard. If your property is also not made according to regulations, you might not get that plan.
- The Lender Involved
As mentioned before, some lenders differ from others. You’ll need to research all the different lenders out there to determine their requirements, terms, and conditions before deciding on one. Some lenders don’t offer any negative equity guarantee, which is quite essential, for example.
This guarantee protects you so that you don’t pay more than you owe to your equity release provider. However, when your lifetime mortgage plan comes to an end, the lender will sell your house and settle the loan amount plus any interest.
If the estate market value decreases and the money can’t repay your mortgage, the lender won’t request more cash from your estate or heirs. Since you’ll be protected by the ‘no negative equity guarantee’, they aren’t legalized to do so. Therefore, consider the equity release firm that will offer you this protection.
- The Efficiency Of Your Solicitor
Ensure that your solicitor2 is a professional and helps you and not make money for themselves. Get an expert solicitor to help your equity release process along faster.
You might be wondering why we’re mentioning these three factors…
Being aware of these factors is essential. Your equity release adviser, alongside a case management team, expertly coordinates all the parties involved to ensure your equity release process is as fast and seamless as possible.
With the introduction of online case management, timescales to take out your equity release have shrunk considerably. The industry has progressed to reduce the need for your paperwork, postage, and even your signatures on documents.
Moreover, due to this progression, a more competitive market has evolved, and to navigate this successfully, it’s now within the lender’s best interests to become more efficient.
A second home is a property that is usually available to the homeowner only, and your provider will let you rent it out for four weeks max. The homeowner also needs to use the second home for at least four weeks annually, and they shouldn’t have any formal contracts with tenants.
Like other equity release plans, the second home mortgage unlocks your property’s value into a lump sum pay-out or a monthly salary. However, you need to be 55 years or older. Your property also needs to be worth over £70,000, but not more than £6 million. Your property needs to be in England, Scotland or Wales as well.
We highlight the pros, cons & features of the ABC.
It all depends on your equity release provider and how equity is tied up in your property. This type of equity release mortgage plan, providers use LTV requirements.
You’ll need to give the calculator some information:
- The value of your second home or holiday home
- Your age
- Your contact details
You’ll then receive the amount you’d get from taking out this mortgage plan.
Yes, it’s 100% safe. You don’t have to be worried that your financial information will be used for something else. There is no risk associated with using the calculator.
Equity release is such a great option if you want money and you want it fast. It’s a way to provide for instant needs at low interest rates. If you’d like to buy a second house or a holiday home, it’s also a great option to make that possible for you and your family. But you don’t always know how much you’ll be able to borrow. And that can be off-putting. No worries! This holiday/second home calculator is there to sort out that problem for you.