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Buying a Holiday or Second Home with Equity Release

There are many different reasons why a homeowner may choose to take out some form of equity release, which is why lenders over the years have made so many different types of equity release plans available.

Whether you are needing to make some large exuberant purchase or simply wish to have a little bit of money laying around, there is likely a type of equity release with terms that will be able to specifically benefit you in your situation.

One of the most common situations you’ll see is homeowners releasing equity from their home in order to buy a second, or holiday, home.

Please call our 24-Hour Helpline: 0330 058 1579

Buying a Second or Holiday Home Using Equity Release

Equity release provides the perfect opportunity for those homeowners getting on in their years to cash in on the value of their home and use that to buy the vacation home of their dreams. Of course, given that retirement age is the age when people oftentimes choose to start living life to their fullest, the appeal of being able to afford your dream home post-retirement is very understandable.

1. The Equity You Release from Your Home Can Be Spent However You Wish

Luckily, there are many great options available when it comes to equity release that will allow you to use your funds to buy the vacation property you’ve always dreamed of. Given that the funds accrued from taking out any type of equity release are always yours to do whatever you please with (not to mention tax-free), those who choose to release equity from their homes are free to use the money to do whatever they want.

2. Live the Rest of Your Life to the Fullest

Quite often, then, you’ll see retirement-aged homeowners cashing in all their chips and using the money to go out with a bang, using the remaining years of their life to do everything on their bucket list. For many, their retirement dreams see them soaring over vistas and travelling the world. For others, a great and luxurious vacation home in an alternative setting is more than enough to provide the paradise they envision.

3. Your New Home Doesn’t Have to Be In the UK

UK homeowners may either choose to use the equity released from their home to buy another (but better) home in the UK or a home abroad. Of course, both will require some unique expenses that those making such plans need to be aware of.

There are always fee associated with buying a house, and these will need to be added to the price of the house before finalizing your budget and going through with the loan. As well, those who use the equity released from their homes are generally advised to buy the second home outright with the funds from their current home, otherwise, they could get trapped in a never-ending mortgage loop.

4. Be Sure That You Know What You’re Getting Into

If a homeowner wishes to cash in on their home and use the money to buy a house abroad, it may either be cheaper or more expensive than buying a vacation home in the UK, depending on the specific location and the type of house. Of course, given the nature of the economy, your cash may be worth more in some places than it is in others.

Be sure to check conversion rates, and make sure that you’ll be able to afford whatever dream home you’ve got your eyes on! As well, living expenses in whatever new location you are planning on moving to should be taken into account.

Please call our 24-Hour Helpline: 0330 058 1579

How Do I Qualify for Equity Release?

Of course, in order to qualify for any type of equity release, you will need to be a homeowner who is over the age of 55. It is ideal that you own your home outright, but it is also possible to release equity from a home when a previous mortgage is not fully paid off. You’ll simply be forced to use some portion of the funds you borrow from your current mortgage to pay off the old one.

1. Equity Release Allows Elderly Homeowners to Release Funds from Their Home

Qualifying for equity release isn’t that complicated of a process, and we are here to help you should you have any questions. Typically, the application process will require both the evaluation of your current property and your predicted ability to pay off the loan when it comes time. So long as you meet all the requirements, you will likely be able to take out a good chunk of cash from the value of your home.

The specific amount that you will be able to borrow will be determined by both the overall value of your home, as well as your life expectancy. The more valuable your home is and the shorter your life expectancy, the more you’ll be able to borrow.

2. Varying Types of Equity Release Plans

Varying types of equity release plans will allow you to either take out a large sum of money initially or will stagger your payment incrementally.

Given that you’ll likely want to pay as much as you can up-front for your vacation home, most people releasing equity in order to do so will want to take out as much money as possible as soon as they can.

The amount of your current home’s value you stand to borrow from the lender in cash will be up to their jurisdiction, but it’s typically anywhere from 20-60%.

Please call our 24-Hour Helpline: 0330 058 1579

Contact Us for More Information

For those nearing retirement who aren’t so sure about what the future might hold, equity release may provide an option to start living your wildest dreams.

If your affairs are in order and you aren’t worried about the state of any inheritance you may pass on to your family, cashing in on the current value of your home to increase your quality of living in your twilight years provides an incredible option that many homeowners are understandably jumping at in increasing numbers.

If you are at all curious about equity release and how it may benefit you, contact us today!

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Looking to release some cash that is tied up in your property?

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How much can you release

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More about equity release

Equity Release FAQs

We are hear to answer all of your equity release FAQs. Clear any confusion with this list of commonly asked questions and their answers.

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Types of Equity Release Plans

There are two kinds of equity release plan, and these are lifetime mortgages and home reversion.

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Equity Release Calculator

Use the equity release calculator below to discover how much money you could release from your home.

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