Equity Launch Strategies Launch That can help Landlords inside the Invest in to Permit Property finance loan Current market
Pursuing the new addition towards the fairness launch ?www.equity-release.xyz
market place of more2life & New Life Mortgages in late 2010, we
now witness the launch of an innovative landlord mortgage loan which
signals a degree of diversity to their lifetime home finance loan
portfolio.
New Life Mortgages had temporarily withdrawn from fairness release current market in 2009. It can be seen they have not been idle during this period, but instead waited for an opportunity to re-enter at the right time & with the right products.
Following on from my previous article on New Life Mortgages rejoining the equity release market place in November 2010, here we discuss the features & benefits to landlords of this unique equity release plan.
How does the scheme work?
The New Life Mortgages Landlord scheme provides a tax free cash lump sum which is based on a percentage of the value of the residential property & the age of the youngest applicant. Plans begin age 55 & a landlord with a portfolio of upto 5 rental properties can release a percentage of the fairness owned within them.
This form of get to let mortgage loan has NO repayment date & NO monthly repayments of capital to make. The loan is finally repaid on the sale of the property which would be when the last surviving borrower has died or gone into long term care.
How do I qualify?
· The minimum age is 55 (for joint applicants minimum age 55 of the youngest)
· The investment property must be in England & Wales
· Minimum property valuation of landlord loan is £100,000 & maximum of £1million
· The minimum release is £25,000 & maximum is £500,000
· Property should be standard construction & flats over 5 storeys are excluded
· If a leasehold property then 80 years must still be remaining on the lease
· An existing mortgage must be repaid at the start of the Landlord scheme
What amount can be borrowed?
This is calculated on the age of the youngest owner & the valuation of the investment properties:-
Age 55 - 16%
Age 60 - 21%
Age 65 - 26%
Age 70 - 31%
Age 75 - 36%
Age 80 - 41%
Age 85+ - 45%
As an example - a 65 year old investment landlord owning an investment property valued at £200,000 could launch a capital lump sum of upto £52,000.
How does the landlord scheme compare to a normal lifetime property finance loan?
The scheme principally affects the same. The capital is raised, interest then accrues & compounds on a monthly basis and then it is repaid when the property is finally sold.
The differences lie in the rental aspect of the scheme; an existing assured shorthold tenancy agreement must be in place for qualification & the property should not be rented to family members.
Also, there are maximum borrowing criteria, similar to a invest in to let mortgage. This states that the monthly interest which is charged cannot be more than the rental income received.
What are the costs involved?
· Valuation fee is dependent upon the value of the investment property
· Application fee and can be added on the loan
· Solicitors & additional legal fees
· Fixed monthly interest rates - 6.39% (age 55-80) & 6.55% (age 81+)
· Early repayment charges are 5% for the first 5 years. No charges after 5 years.
· An advisor fee charged by your fairness launch specialist
Practical uses of the New Life Landlord invest in to enable property finance loan?
The fairness release funds can be used for many purposes.
Evidently there are market opportunities arising within the rental market place & can be seen as house prices reduce & rental yields have increased. Many bargains are there to be seen. Should any residential landlord wish to increase their property portfolio, but have concerns over the expenditures in set up costs of invest in to allow mortgages then the landlord scheme can be considered.
A potential landlord, who witnesses a new investment opportunity, but alas has limited funds for deposit, then the landlord fairness release scheme could aid. The borrower should assess the values of all properties under his get to let portfolio & by using the equity launch calculator can establish how much equity can be released to bridge any shortfall required.
Another example, with the 55+ age group who are eligible for this invest in to let mortgage could be several tax implications.
Should some of the landlords assets require disposal, in preference to selling the property & incurring capital gains tax, then the landlord plan can be applied for instead.
Finally & the most common purpose for this scheme could be debt consolidation reasons. If one is experiencing financial difficulties with repayment of a acquire to allow property finance loan or other personal finances, then subject to your amount that can be raised, then these debts could be repaid.
Alternatively, the landlord could just had enough of paying the obtain to allow house loan, but would rather be in receipt of the gross investment rental income which can then provide extra disposable income in retirement?
New Life Mortgages had temporarily withdrawn from fairness release current market in 2009. It can be seen they have not been idle during this period, but instead waited for an opportunity to re-enter at the right time & with the right products.
Following on from my previous article on New Life Mortgages rejoining the equity release market place in November 2010, here we discuss the features & benefits to landlords of this unique equity release plan.
How does the scheme work?
The New Life Mortgages Landlord scheme provides a tax free cash lump sum which is based on a percentage of the value of the residential property & the age of the youngest applicant. Plans begin age 55 & a landlord with a portfolio of upto 5 rental properties can release a percentage of the fairness owned within them.
This form of get to let mortgage loan has NO repayment date & NO monthly repayments of capital to make. The loan is finally repaid on the sale of the property which would be when the last surviving borrower has died or gone into long term care.
How do I qualify?
· The minimum age is 55 (for joint applicants minimum age 55 of the youngest)
· The investment property must be in England & Wales
· Minimum property valuation of landlord loan is £100,000 & maximum of £1million
· The minimum release is £25,000 & maximum is £500,000
· Property should be standard construction & flats over 5 storeys are excluded
· If a leasehold property then 80 years must still be remaining on the lease
· An existing mortgage must be repaid at the start of the Landlord scheme
What amount can be borrowed?
This is calculated on the age of the youngest owner & the valuation of the investment properties:-
Age 55 - 16%
Age 60 - 21%
Age 65 - 26%
Age 70 - 31%
Age 75 - 36%
Age 80 - 41%
Age 85+ - 45%
As an example - a 65 year old investment landlord owning an investment property valued at £200,000 could launch a capital lump sum of upto £52,000.
How does the landlord scheme compare to a normal lifetime property finance loan?
The scheme principally affects the same. The capital is raised, interest then accrues & compounds on a monthly basis and then it is repaid when the property is finally sold.
The differences lie in the rental aspect of the scheme; an existing assured shorthold tenancy agreement must be in place for qualification & the property should not be rented to family members.
Also, there are maximum borrowing criteria, similar to a invest in to let mortgage. This states that the monthly interest which is charged cannot be more than the rental income received.
What are the costs involved?
· Valuation fee is dependent upon the value of the investment property
· Application fee and can be added on the loan
· Solicitors & additional legal fees
· Fixed monthly interest rates - 6.39% (age 55-80) & 6.55% (age 81+)
· Early repayment charges are 5% for the first 5 years. No charges after 5 years.
· An advisor fee charged by your fairness launch specialist
Practical uses of the New Life Landlord invest in to enable property finance loan?
The fairness release funds can be used for many purposes.
Evidently there are market opportunities arising within the rental market place & can be seen as house prices reduce & rental yields have increased. Many bargains are there to be seen. Should any residential landlord wish to increase their property portfolio, but have concerns over the expenditures in set up costs of invest in to allow mortgages then the landlord scheme can be considered.
A potential landlord, who witnesses a new investment opportunity, but alas has limited funds for deposit, then the landlord fairness release scheme could aid. The borrower should assess the values of all properties under his get to let portfolio & by using the equity launch calculator can establish how much equity can be released to bridge any shortfall required.
Another example, with the 55+ age group who are eligible for this invest in to let mortgage could be several tax implications.
Should some of the landlords assets require disposal, in preference to selling the property & incurring capital gains tax, then the landlord plan can be applied for instead.
Finally & the most common purpose for this scheme could be debt consolidation reasons. If one is experiencing financial difficulties with repayment of a acquire to allow property finance loan or other personal finances, then subject to your amount that can be raised, then these debts could be repaid.
Alternatively, the landlord could just had enough of paying the obtain to allow house loan, but would rather be in receipt of the gross investment rental income which can then provide extra disposable income in retirement?
Whatever
the reason for a landlord releasing fairness, ensure you always obtain
independent advice from a specialist & regulated by the FSA.