Many retired people in Malta find that their home is the most valuable asset which they possess. Equity release schemes are a way to release that value, while allowing them to continue to live in the home for as long as they wish to do so. The money released may be used for any purpose chosen by the homeowner, for example for home improvements, a boost to retirement income, or for repayment of debts. There can also be some disadvantages to these schemes, and any applicant can expect to have these discussed at the time of their application. There are many industry bodies that work around the clock to regulate the scheme providers.
Owning a property in Malta is not an easy task. Houses do not come cheap and home owners save up throughout their lifetime to repay the debt they accumulate due to their home purchase. One option to release money from the home is to sell it, and to move to a smaller and cheaper property. However, equity release programs in Malta allow money to be released from the home, while the person may continue to live there for as long as they wish to do so.
The money freed up may be used in any way which the home owner desires, for example it could be spent on home improvements, it could be used to repay credit card debts, or it could provide a long-term boost to retirement income.
Eligibility in Malta
To be eligible for equity release in Malta, it is required that you own your home outright, in other words there is no outstanding mortgage. Typically, the owner and their spouse should be over 60 years old. There may also be a minimum value placed on the home, although all property except the very smallest is usually eligible.
There are usually a number of options for the way in which the money can be released. It is not necessary to take all the money straight away, for example there are draw-down schemes where installments can be paid out as and when the homeowner requires them. Other schemes can pay a lifetime income to the homeowner, which gives a useful long-term boost to pension income.
There can be some disadvantages to these schemes, and these will be discussed with the homeowner when they make their application. Equity release reduces the amount of money which can be left to beneficiaries in a person’s will, and additionally the money made available may reduce a person’s eligibility for state benefits. There can also be a change in a person’s tax situation.
As equity releases are a form of mortgage, there are also some fees which must be paid, including solicitors’ fees and valuation fees.
The industry bodies in Malta provide guarantees to homeowners that choose equity release. Firstly, the homeowner is guaranteed that they will never owe more money than the value of their home. Secondly, they have the rights to remain in their home for as long as they wish to do so, and finally they may move to a new home if they wish, while keeping the scheme in place, without any penalty.
For more information visit Karkanja property developer and investment firm