WHAT IS EQUITY?
This is becoming more popular again. In the current economic climate people are choosing to release equity that they have in their property. This will give them a lump sum which they can spend as they wish.
Imagine your house is worth £100,000, and your mortgage has £60,000 left to be paid with no other debts registered against your home. In this scenario, the equity in your house is £40,000 - i.e. the value of the house which doesn’t have to be repaid to your mortgage company.
Please note, people can also have other debts registered against their property - registered loans, second mortgages etc. These will need to be factored into any calculation when you are trying to work out the level of equity in your house.
Our lead property solicitor is Peter Skinner, ably assisted by Josh White.