Your youngest daughter just graduated and wants to start a 3D animation studio business. However, she doesn’t have the capital required to start, and your older kids can’t help her out with the staggering economic recession. You’ve also checked your pension1savings and investments, and nothing seems to add up to the total amount she needs. You’ve seen her work and can attest to her prowess in the field, so this will be a fantastic investment.
After failed attempts at getting the amount required, you suddenly get a light bulb moment – equity release. Equity release mortgage is a financial plan that offers you tax-free cash and allows you to continue living in your home till you pass on or move into residential care. To qualify for this incredible scheme, you only have to be 55 years and above, a UK resident, and own a home worth at least €70,000.
Since you’re 60 and own a home in Edinburg, you only have to find out your estate’s worth since the estate market value keeps fluctuating. After some equity release advice from your financial advisor, and a visit from an independent surveyor, you discover that your home is worth €560,000.
What’s the Equity Release Process?
Well, now, you can start the equity release2 process and be closer to getting the cash to actualize your favourite daughter’s dream. The home equity release process is rigorous and offers you the opportunity to think through carefully about the plan. It involves several steps which vary from one equity release company to another. Nonetheless, the standard process involves:
Selecting a financial advisor – Choosing a financial advisor is one of the most critical steps to take. Since you already have an advisor, you can go on to the second step. In case you don’t, you have to ensure that you choose a firm within your reach and that the advisor you want can visit you at the comfort of your home when the time’s right.
Choosing a reliable equity release plan – You have to select the best equity release plan, one that suits your needs. You can either choose a lifetime mortgage or a home reversion plan. After picking the perfect scheme, your advisor will provide you with documentation that’ll emphasize the benefits, drawbacks, and expenses involved with the mortgage3.
Sending an application – Your advisor will make an application on your behalf to your preferred equity release lender. Upon receiving the application, the lender will start a valuation process to figure out the actual value of your estate. The equity release company caters to this process and is carried out within a week of your application.
Finalizing the process – After valuation and some amendments to paperwork, your advisor and solicitor of choice will get copies of the final paperwork. You’ll also have a sit down with your solicitor4to discuss the legal requirements for property equity release. After going through the regulatory procedure, the solicitor will then start the conveyancing process together with the lender’s chosen solicitor.
Money in the bank – When both parties are satisfied, the two legal representatives will set a completion date. The solicitor will settle any advice and fees directly from the equity release proceeds and the balance transferred into your account.
So, just like that, now you have money to fund your daughter’s animation studio business. Isn’t equity release God-sent? If you’re still on the couch, stressing about money to start a business and think you’re eligible for this plan, get up and start the process now. It’s that simple-ish!