Of course, we are all looking forward to the day when we make that final mortgage payment. After 20-30 years of having to see a large chunk of your monthly salary go to your home loan, there will come a day when you own your home outright, but you don’t have to wait that long to release some of the equity you have accrued, as there are ways of taking out a second mortgage that allows you to access some of your wealth.

What is a Caveat Loan?

A caveat loan is basically a second mortgage, which is secured by the property, and such a loan can be arranged in a matter of hours if you approach the right online lender. You might, for example, wish to take your partner on a round the world cruise, or have those old windows and doors replaced with UPVC made to measure units, and with a caveat loan, you can access the profit you have accumulated in your home.

Online Solutions

Perhaps the first thing to do is have your home valued, which will help you to find out how much you can borrow using a caveat loan, and, of course, the amount you can borrow would depend on the amount of equity you currently have. The online lender is geared up to rapid approval, and in many cases, the finds are transferred on the same day as making the application, and you can’t get any quicker than that.

An Example Case

As an example, let’s look at a Sydney property; the asset is currently worth $300,000 and the owner has still to pay $150,000 of their mortgage, so they could apply for a second mortgage to the value of around $130,000, as the amount borrowed cannot be more than the current equity. So, the homeowner can borrow enough money to extend, or take a long holiday, or even purchase a new car, as the lender is not concerned with what you do with the money.

Range of Reasons to Remortgage

You might see a fantastic business opportunity and need some capital to start your own venture, or you would like to extend your home to accommodate a growing family, or even that you would like your partner to see the world while you are both young enough to appreciate such an experience. As far as the loan provider is concerned, if you have sufficient equity to cover the entire loan amount, that is all they are interested in.

Crunching the Numbers

Of course, any loan will incur interest, so you do need to crunch the numbers to ensure that you loan is competitive, and the online lender usually offers the best rates of interest. If you are financially secure, you could repay the loan within a few years, which keeps the interest rates low, or you could have a loan package that allows you to change the amount you repay, giving you a high degree of flexibility.

Taking out a caveat loan is the ideal way to gain access to the wealth that is tied up in your home, and with online solutions, the loan can be approved within a few hours.