Equities held by private individuals
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nicol
Apprentice
Joined: 06 Apr 2005
Posts: 3
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 Posted: 05/28/08 - 08:26 Post subject: |
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| Hello there everybody! My name is Harrison and I was wondering if you could give me some information about one thing in economics. I am not an economist, so I don’t have an adequate knowledge. I heard that equities held by private individuals can be used for getting bank loans. Can you tell me how does it work? Thank you. |
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morty
Apprentice
Joined: 08 Nov 2004
Posts: 10
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| Posted: 06/26/08 - 22:14 Post subject: |
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| Hi there Harrison. I will try to give you as simple explanation as possible. Individual who hold some equity can indeed use it to raise money from banks or some other financial institutions. This scheme is called equity release. The most common case is when people use their real estate (mostly houses) to obtain funds. You get a loan from the bank and you give your house (or some other asset) as a guarantee. Basically, it’s like getting a mortgage. If you are going to perform this kind of scheme, I would suggest you to be careful, because you might loose your property if you don’t pay back the loan. Well, that would be all. If you have some more questions, I’ll be glad to help you. Bye! |
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