Retirement is about relaxation, enjoyment and no worries, not about being frugal and doing without certain basic pleasures.
Many, who retired to the Coast some years ago, are finding it difficult to meet the increasing costs of living with their pension or investment income. Costs have increased significantly but when this is linked to falls in investment returns and stock market crashes, the standard of living has to be reduced accordingly.
Due to the property value increases on the Costa del Sol, certain banks will use your property as security for a loan and allow you to invest the funds released into an investment portfolio. With interest rates at low levels, it is now possible to invest sensibly and safely at rates much higher than the cost of the borrowing. The additional income generated can be drawn down as much needed extra cash.
Most people want to ensure that there is no risk to their property and home. Equity release is unlike a mortgage and, although a charge would be registered against your property, the lender looks upon the investment portfolio as the principal collateral for the loan. Provided that secure and protected investments are used to ensure that the capital value does not fall, then there will be no risk to your property.
Do not enter into an equity release scheme that is inflexible. Circumstances change and the scheme should be able to adapt to these changes.
We have introduced many satisfied clients to a scheme available to individuals owning Spanish property with a value exceeding 350,000. The lender is willing to advance funds of up to 100% of property value. Up to 25% of this can be released to the owners for whatever purpose they require, the remainder is used to create the investment portfolio from which a regular income can be drawn.
No capital repayments are needed, the interest arising on the loan is paid out of the income and growth produced within the investment portfolio.
Before entering into any such scheme make sure that all the terms and conditions attached to the loan and the investment portfolio have been explained and fully understood. Don't rush into a scheme because it promises large or exceptional returns, use common sense and seek advice from your accountant or professional advisor.
Equity release can also be attractive to other more fortunate and wealthier individuals living in Spain. They too have seen their property values increase appreciably over this same period. By making additional funds available for investment purposes, they can in effect double the investment opportunities available.