Equity Loan: A Viable Option for Asset-Rich, Cash-Poor Homeowners
Jack and Lina Tan have been married for over 25 years and are now in their 60s. They are nearing retirement and have lived in their landed home for the past decade. However, due to the impact of COVID-19, Jack's restaurant has incurred significant debts, prompting the couple to urgently raise some cash. It’s essential to recognize that options like an equity loan exist for those needing extra funds, aside from selling their home.
Initially, a friend suggested they sell their house to liquidate the property, restructure their investment portfolio, and raise the necessary cash. However, they wanted a 30% premium over the valuation of their home, making it difficult to find buyers willing to pay such a high price for a property that has not been renovated since they purchased it 20 years ago.
While running at MacRitchie Reservoir, Jack met James, a property agent familiar with equity loans. This type of loan allows homeowners to access cash from their property without selling it. James then connected Jack and Lina with Tony, a mortgage broker experienced in arranging equity loans. With this financial solution, the Tans were able to navigate through their challenging situation.
