Monday, 13th July 2020

This Month's Magazine
Equity Release – how it has worked for some

Equity Release – how it has worked for some

In order to illustrate some of the benefits and purposes served by an Equity Release Plan, Graydon Associates, who were instrumental in introducing the first equity release scheme to the Costa, are quoting some factual examples applied to their clients.

1. After the death of her husband Geraldine found that he had made a number of cash bequests to some of his relatives. However, apart from their family home, there were insufficient other assets to meet these commitments. In addition she discovered that her reduced pension income was much lower than she had anticipated and believed that she had no other option but to sell the family home, in which she had anticipated living for the remainder of her life. By entering our equity release programme she was able to raise sufficient money to settle the bequests, generate sufficient additional income to live in the manner to which she has become accustomed and, more importantly, she is now able to live the rest of her life in the home and environment in  which she is comfortable.

2. Susan and James had purchased a property some years ago with the help of a conventional repayment mortgage from their local Spanish bank. James worked on a part time basis in the construction industry but was badly injured and unable to continue working. This resulted in a financial strain on their resources and culminated in them falling behind with mortgage repayments. By entering the equity release plan they were able to repay their mortgage in full and free themselves from future monthly repayments. In addition, James was able to pay for private medical treatment on his damaged leg, which enabled him to return to his part time occupation much quicker than had been anticipated.

3. John and Eileen are in their seventies and retired to Spain some years ago. It was their life long ambition to travel the World before they died. Our equity release plan enabled them to go on a six month around the World cruise before returning home and to continue the journey by reliving their experiences with their friends and neighbors.


4. Angela had wanted to start a hairdressing and beauty business for a number of years but did not have the necessary capital to do so. She approached a number of banks for finance and although she owned her own property was unable to raise the funds as her level of income would not support the level of loan required. By entering the equity release programme she achieved her objective and her salon opened in October 2004. The business started to generate a positive cash flow in March 2006 and Angela is delighted with the new life the programme has given her.  

5. Malcolm used the equity released from his substantial property in Marbella to purchase a small apartment in Paris and the additional income generated is being used to pay for the upkeep and maintenance thereof.

All of the above were achieved by taking “interest only” loans on properties located in Spain and using a proportion thereof for the property owners own requirements.

The secret of the planÂ’s success is to ensure that the remainder of the loan is invested securely and safely, producing sufficient returns to ensure that the ongoing annual interest and costs are met, any surplus may then be taken as income. Upon the death of the property owner, the beneficiaries may continue with the scheme or sell the property and retain the difference between the amount borrowed and the sale price. 

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