With the current economic state worldwide and locally, it never hurts to have extra cash in your pocket. That’s why equity release has become so popular in the UK! You can now get extra cash by releasing it from your property! How much money? We’re here to tell you all about it!
We should explain the equity release before we dive into interest-only mortgages.
If you’re older than 55 and you’re struggling to get some needed money, then equity release is a good option for you. You might also be considering equity release as a means to a more comfortable or luxurious retirement. However, as with anything in life, it’s always good to view the full scope of things before making rash decisions.
Adverts may be selling equity release as the next best thing. However, it’s not for everybody. Let’s run through everything you need to know about equity release, how it works and if it’s for you or not.
Equity release refers to your property’s items/parts that let you access your money tied up in your house. However, you can only gain access once you’re 55 years or older. You can get the capital value of objects in your home as a lump sum or an income based on the house’s value. You’ll just need to repay that money you accessed at a later stage.
So, what’s an interest-only equity release mortgage then?
When it comes to equity release, there are many options to choose from. Interest-only mortgages1 is one of them.
With interest-only plans, you only need to repay the interest on your loan until the end of its term. When you die or go into long-term medical care, the period ends. Then you’ll be required to repay the loan, or your loved ones will need to repay it to the equity release provider. As with equity release mortgages, interest and capital repayment may be held indefinitely until the house is sold. As mentioned before, this is when the equity release user dies or need constant care2.
Let me tell you something.
Although many people choose, interest-only mortgages, interest-only and equity release mortgages are popularly used by older people, significantly since most providers increase older age limits on interest-only products.
But wait a minute.
When it comes to heirs, it’s essential to have a trustworthy loan that allows you to put some money away for your family to inherit when you die. Well, interest-only mortgages allow this to happen. They enable you to make interest payments regularly on your release capital. And, interest-only mortgages permit you to keep your equity release loan-level balanced always.
When the loan period expires, and you’ve been making regular interest payments throughout that period, you’ll only be required to repay the original loan amount.
You might be wondering about the amount you can loan through this type of mortgage. Well, there’s an excellent tool for this: the Interest-Only Equity Release Calculator. You don’t have to struggle to figure out the maths yourself. This calculator will tell you how much money you can end up within just a few simple steps.
How Do I Use The Interest-Only Equity Release Calculator?
The amount of money you release through an interest-only mortgage will differ from provider to provider. However, it’s possible to get an estimated amount with the help of this calculator. It’ll calculate your estimated loan amount if you have an interest-only equity release plan.
Well, you’ll need to provide the calculator with a few crucial details about yourself. But don’t worry, it’s perfectly safe to do so. Firstly, it’ll ask for the value of your house. Since mortgages have to do with your property, the value of your home is significant to know. The loan provider will send someone to your house to evaluate its worth. However, if you haven’t had your property evaluated, simply input your home’s market price for now.
Secondly, the calculator will then ask your age, the person’s name taking out the loan and contact details. Simple as that! You’ll then be provided with the estimated loan amount of an interest-only mortgage.
The amount of money you release through an interest-only mortgage will differ from provider to provider. However, it’s possible to get an estimated amount with the help of this calculator. This calculator will precisely calculate your estimated loan amount if you have an interest-only equity release plan.
The first thing it asks you is the value of your property or home that you’ll sell to release equity. Then, it asks you how old you are, your name and phone number.
Yes, it’s 100% secure. You don’t have to be afraid that the calculator will use your information for something else. It’s only there to give you an estimated amount of your possible loan.
You can use this excellent tool to work out how much money you’ll be able to end up with when you take out an interest-only equity release mortgage. So it’s great for those who are considering equity release and want to know if it’s the best option for them financially.
It’s relatively easy to determine what amount you can get when you take out an interest-only mortgage through an equity release provider. You simply need to input a few details, and there you have it! If you’re still considering whether or not interest-only mortgages are for you, feel free to contact us with any further questions.