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ARTICLE · 31 MAY 2016

Home Equity Release: What Is It And How Does It Work

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The lending process is broken down into three stages. The bank provides a loan against the property and the money is used to finance another purchase like income-generating commercial property.

United KingdomReal Estate and Construction
Yulia Kozhevnikova
Yulia Kozhevnikova

Home Equity Release is a loan that is backed by property you already own. It can provide the required funds to make a profitable investment like commercial property or securities, but also if you need emergency capital for an unexpected situation.

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Benefits

  • No need to sell or rent out the property you already own.
  • It comes with beneficial lending terms.
  • Banks are more likely to grant the loan for exceptional property investments that wouldn't usually obtain financing (e.g., a retirement home).

The lending process is broken down into three stages. The bank provides a loan against the property and the money is used to finance another purchase like income-generating commercial property. The profits then go towards expenses like maintenance costs and loan repayments — the rest is spent how the investor chooses.

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