subject: Affordability Of Equity Release On Property Is The Key Considerable Factor [print this page] The availability of mortgage loan facilities fluctuates with the changing scenario of economy. The scale of interest rates on mortgage loans goes up and down in the volatile finance market. Such financing options are not suitable for the retirees having no permanent means of sustenance. Money from equity release on property is the most feasible alternative to the earning from a profession for them after retirement. The retirees having a rich residential property portfolio can easily take advantage of this retirement solution.
Reference to the Term Equity Release
To explain the term equity release on property, equity is the monetary value of a property that has accumulated over a period of time. It also refers to the money that is locked in existing properties that were bought in cash. In the finance market of some countries, equity release is deemed as a kind of financial product that is not the principle value but the accumulated value of a housing property. In a booming property market, the equity value latent in properties is highly considerable to be released. The money from equity release on property can also be utilized for investment purpose.
Many retirees who mostly depend on the returns from their investments take up this financing principle to enrich their property portfolios.
Equity Loans in the Sophisticated Market
In the sophisticated finance market of the countries of North Europe, the environment is politically and economically stable. The banking institutions of those countries are generous in terms of providing equity release loans. Their lending policies are not cut and dried. The process to undergo equity release on property, too, is convenient. Equity release companies provide loans equivalent to 80% to 90% of the total property value on minimal interest as they feel at home about the security of lending against a valuable and stable asset.
Affordability is the Key Factor
The affordability of equity release loans is the key consideration for the retired homeowners. Monthly repayments for the loans are as low as possible. Set up costs too are relatively low. Affordability makes equity release on property as an easily accessible funding option for the majority of retired homeowners. By investing money from the release of equity from the residential property, the homeowners can make rental income to cover his or her basic monthly expenses. The rental income will also provide for monthly mortgage payments.
In the less sophisticated markets of Spain and Italy, equity release companies are very cautious about lending equity release plans to the retired old homeowners. That is because of economical instability in the emerging financial markets of those European nations.
