Introducing Antony Beltrame
Antony is the National Lending Manager at Reventon. He’s been with us since 2013 and has been in the industry since 2002, which means what he doesn’t know about property and finance probably isn’t worth knowing. We grabbed Antony for a chat about equity releases, and how Reventon clients can use equity release in their finance and investment strategies.
What is an equity release?
In a nutshell, an equity release is a way for homeowners to release funds from their home, without selling up.
How does it work?
An equity release extracts funds from your home and puts them in a different account – one that, unlike the funds tied up in your home, you can access and use. To use an example, if your home is worth $1million and you currently owe $400,000 on it, you have $600,000 of equity in the home. People typically imagine that to release these funds, they’d need to sell their home – with an equity release, this isn’t the case.
Instead, a secondary loan is set up – called an equity release or an investment loan – and the money is taken from your home and put into an account that you can access.
How much equity can I release?
An equity release allows you to borrow up to 80% of your home’s value, minus what you owe – therefore in this example, you could release up to $400,000. It’s important to keep in mind the dangers of over-leveraging. It is always recommended to get personalised advice about how much you should take in an equity release – you don’t want to max-out your loan amount just because you can and then get into trouble later down the line if your circumstances change.
What can I use the equity for?
Depending on the loan you use for an equity release, you could technically use the funds for anything you like. But, it’s not wise to be taking out an equity release on your home for things like holidays or a new car – this money won’t be working hard for you and once you’ve spent it, it’s gone. Instead, we want this money to be used to build your wealth in the long-run (so you can afford as many holidays or new cars as you like in the future). That’s what we call good debt versus bad debt.
We suggest using the equity released form your home for deposits and costs on an investment property. We’ve talked a lot about the benefits of investing in property for wealth building, so it’s important to be wise with this financial resource.
You can hear more from Antony on the equity release process below, or head over to the Reventon video hub where there is a wealth of insights into your financial questions. Alternatively, if you’d like to speak to one of the Reventon team, you can book yourself a free advice session to get personalised guidance on your wealth building journey.