If you are looking into the business of releasing equity from your home or from another of your valuable assets, you will doubtless be keen to determine exactly how much money you will have access to. As with all financial decisions, before you sign up for a scheme, you will need to do a little research and ask yourself some questions.
It is important to remember that the amount of equity available to you is not always simply determined by the market value of your house. There is a variety of other factors to consider. To begin with, you will need to consider any existing mortgage that you may have on your home.
Even with clever products such as Prudential increasing cash reserve, you will only be able to release equity to the value of the difference between the market value of your home, and the amount you still owe in mortgage payments. Of course, if your mortgage exceeds your house value then you will not be able to release anything.
In addition, you will need to consider your credit history as well. Lenders will invariably check your record of debt payments and, unless you score well on this test, you may be prevented from accessing equity release schemes altogether.
In short, equity release is by no means the easy option that many people believe it to be. It is, on the contrary, a business fraught with tests, checks and evaluations.