Mortgage equity loans
As house prices in the UK continue to climb and mortgage loans are paid off more quickly than ever before, a huge number of households find themselves in the happy position of having a great deal of equity in their homes. In fact, many such equity rich homeowners have reached this fortunate situation more out of chance than as a product of any shrewd financial judgement. It just so happens that a lot of today's equity rich were in the right place at the right time in the mid 1990s, or managed to hang on to their homes through the late 80s and early 90s housing market crash.
Now, you might imagine that with equity values of £200,000 or more not being unusual in a property today that homeowners would be rolling in it! Foreign holidays, gleaming new cars on the driveway or a luxury villa in the South of France spring to mind. The reality of the situation however is very different! Many equity rich homeowners are cash poor. They struggle to get by, worrying about where the money is going to come from to pay the next electricity or gas bill and the mortgage. It's alright having equity in your home, but if you can't access the funds you're no better off than someone who has a large mortgage and little equity.
A new way to enjoy positive equity - mortgage equity loans
Times though are changing. Lenders are increasingly providing equity rich homeowners with a way to unlock the equity in their homes. Known as mortgage equity loans or lifetime mortgage loans, borrowers are able to open up secondary mortgage loans secured against a percentage of the equity in their home. What's more, the monthly payments on equity mortgage loans can be very low as interest owing on the mortgage loans in some instances are rolled up and added to the loans amount, only to be paid off upon sale of the property or when the owner dies.
Mortgage equity loans offer those who are struggling with their immediate financial situation the opportunity to reduce the pressure on their cash flow and to get on with the business of really enjoying life. Lenders impose few restrictions on mortgage equity loans leaving you free to spend your money on whatever you want. If it is a new car you'd like or a foreign holiday then releasing equity in your home through these types of mortgage loans will help you realise these things and more.