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Everything you need to know about Equity Release in Spain
In these uncertain times when pensions are not performing as perhaps anticipated and the Stirling / Euro exchange rate is low, many over 65’s find that they are struggling to make ends meet. A solution for over 65’s Spanish Homeowners may be an Equity Release plan, sometimes also know as a lifetime loan.
What exactly is an over 65’s Equity Release plan ?
Basically it is where a lender advances the homeowner an amount of money by way of a cash lump sum, a guaranteed amount monthly over a fixed period of time, or a mixture of both – but unlike a normal Equity Release plan, there are NO monthly repayments during the borrowers lifetime. The property always remains yours and you can live in it for as long as you wish to do so.
The loan is secured on the borrower’s property that must be mortgage free and instead of making monthly repayment in reduction of the loan, the interest is calculated and added to the loan. The loan only becomes repayable upon the death of the last surviving partner. At this point the lender will allow the inheritor of your property a period of time to sell the property, usually 12 months. In some instances, the lender will offer the inheritor a mortgage – enough to pay off the loan.
The amount of the loan is decided by the lender by reference to several points including the borrowers age and the property value. Seniors Capital will work with you so the plan meets your financial requirements. An over 65’s Equity Release Plan can also be an effective tool in the reduction of inheritance tax.
Example : Mr & Mrs Smith, aged 71 and 71 own a property in Spain valued at 160’000 Euros. The lender has offered 2 options :
Option 1: - 34’840 Euros - 5’000 Euros of this is paid as a cash lump sum, with a guaranteed pension of 497.34 Euros paid every month over the next 5 years.
Option 2: - 20’882 Euros paid in a one-off cash lump sum.
There are just 5 easy steps to obtaining a Seniors Capital Equity Release Plan
Once you have spoken with your family, familarised yourself with what is involved and made the decision to take things to the next stage, there are just 5 easy steps to take :
1.) Contact us today, by clicking our logo (above) and completing the enquiry form with a few basic details. We will then come back to you at a time to suit you where a friendly advisor will answer any questions you may have and complete quick fact-find with you.
2.) Free Personal Illustration : We will provide you with a free personal illustration of how much you can borrow showing the cash lump sum and pension options. We will also provide a clear account of the set up costs (Notary, Land Registry etc...) associated with the loan so there are no surprises, if you should choose to proceed.
3.) Meet the lender : We will organise a meeting between yourselves and the lender where the plan can be discussed at length and any further questions that you may have can be answered.
4.) Valuation : the lender will require a professional valuation of the property in order to confirm the loan offer. You will need to pay for this prior to the valuation being completed. Once the valuation report is received by the lender they will then issue with a formal loan offer.
5.) Notary : All loans are completed by a Notary and registered at the Land Registry as required by Spanish Law. We can organise a Notary most convenient to you aswell as offer free advice from our own team of solicitors. Following completion meeting at the Notary the funds are normally transferred to your account within 2 – 3 working days.
Please do not hesitate to contact with ant further questions or concerns you may have by clicking on our logo (above) and completing the enquiry form at the foot of the page.
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