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Where to Compare Equity Release Pros and Cons Before Completing Any Calculations

Compare the Equity Release Pros and Cons Before Completing Any Calculations

Over a decade ago, releasing equity from your home was virtually unheard of. Today, equity release plans are flourishing, with more and more people choosing to turn to the equity in their homes for relative financial security during retirement.

Equity release is not suitable for everyone, but it does provide a flexible solution for many, and the growing popularity of equity release plans are proof of this. Many new and more flexible products have become available in recent times, and the fact is that the equity release sector has never looked more vibrant.

But the world of equity release schemes still remains confusing for many and it is difficult to negotiate your way around so many different plans; all with their own terms of lending and eligibility criteria. How then does one find the equity release plan that best suits their individual needs and circumstances? And how does one compare different equity release plans to find the best equity release deals?

The answer lies in speaking to a qualified equity release expert who can guide you through the different options and help you understand the equity release pros and cons of each alternative in the context of your individual needs. But firstly, a simple way to sift through the various options is to use an impartial equity release schemes calculator to find out the maximum amount you could raise through different equity release providers.

Equity release pros and cons

These equity release pros and cons are paramount to the decision-making process as they gauge one’s attitude to risk which your equity release adviser will use towards his recommendation. They will not only outline all that is good about equity release schemes, but advise the pitfalls of equity release schemes also. Knowing both sides of the story is essential moving forward as this could be classed as the biggest financial decision of your life, your first ever mortgage aside.

It is important to find a comparison site that offers objective and impartial advice, and has an up-to-date database of providers and plans. This way you can be sure that you are not losing out on something better and are getting the fairest picture of what could be available to you. Check whether they list all the equity release pros & cons for you to easily understand before even seeing or paying for equity release advice.

Independent advice companies like EquityRelease2go.com have pioneered the use of equity release calculators that can quickly work out the maximum release based on some simple facts about your case, including your age and property valuation. These companies continue to provide an impartial and up-to-date service to users who are looking to find the most suitable home equity release scheme.

Not all free equity release calculators are truly free and fair. Some calculators only show a fraction of the picture; while some others use personal information for unrequested marketing from paying partners. While many providers and even comparison sites use equity release schemes calculators as a ploy to extract information from enquirers, there are also companies that seek to provide genuinely unbiased information to customers based on results from all reputable equity release providers.

In summary, it’s vitally important to do your research before committing to anything, seek the equity release services of a reputable independent company who offer a nationwide advisory service such as Equity Release Supermarket whose testimonials & client feedback seem to justify this.

Where Can I Find the Prudential Equity Release Calculator for Existing Plan Holders?

Is There a Prudential Equity Release Calculator for Existing Plan Holders?

Prudential is no longer offering lifetime mortgages to new customers. However, Prudential had one of the most successful lifetime mortgage schemes at the time, so there are currently plenty of existing plan holders who still have a Prudential lifetime mortgage plan.

So, can existing customers release additional equity from their property? And if so, is there a Prudential equity release calculator that can help existing plan holders understand how much they could release?

The short answer is that there isn’t a Prudential equity release calculator for existing customers. However, there is way for customers to find out if they can release additional equity from their property and also find out how much, without the need for an equity release calculator! By following some simple steps, it is possible for existing Prudential equity release customers to have additional funds in their bank in as little as two weeks.

Prudential offered their lifetime mortgage in two forms – a fixed single lump sum lifetime mortgage and a more flexible drawdown lifetime mortgage which allowed for more than one equity release lump sum. For those who have a single lump sum mortgage from Prudential, releasing additional funds on the same mortgage may not be possible.

For those who have a drawdown lifetime mortgage with Prudential, there is no need for an equity release calculator to find out how much they can release again. If they have sufficient equity left in the property they can easily release it by making a drawdown request. But first they will need to find out how much they can release.

Check your Prudential annual statement

To do this, it is necessary to check the last annual account statement from Prudential. The statement will outline how much equity is left in the property. If you’re unsure about whether you have a single lump sum or a drawdown mortgage, your statement will also clarify this or contact your local equity release adviser.

The figure you are looking for is the remaining funds left in your drawdown facility. These are unused funds that were set aside from inception of the Prudential lifetime mortgage plan. The basic calculation for remaining fund availability is:-

Total reserve facility from outset – capital withdrawn to date = cash available now

Once you have made sure you can release more funds, you can simply make a request to do so directly from the provider or with the help of an equity release adviser. The drawdown request can be made by filling in a form online, or over the phone by calling the provider.

An equity release calculator tells users if they are eligible to release more equity and how much they can release. For existing customers for the Prudential lifetime mortgage, this is exactly what your annual statement will tell you. You can consult an equity release expert or the provider if you are unsure about the type of mortgage, or need further advice about additional release.

Consider switching plans if unsuccessful

Should you be unsuccessful in your goal to raise further funds with a Prudential equity release, then you will need to consider the alternatives. It will have been over 4 years ago that the last Prudential lifetime mortgage scheme also known as the Property Value Release Plan was written.

If Prudential’s equity release calculation ‘says no’ and you do need extra cash funds then consider an equity release remortgage and analyse whether it would be worth swapping a lifetime mortgage scheme. With interest rates as low as they have ever been, it may not be a bad idea anyway!

However, before you even consider switching equity release schemes, remember the Prudential early repayment charges were linked to the Bank of England base rate which currently is only 0.5%. The latter Prudential Property Release Plans were taken when the base rate was still at 0.5% so they could effectively remortgage without any early repayment charges (ERC’s). However, early plans could have been taken out when the base rate was 4-5%, thus meaning a penalty would arise if the scheme was transferred.

Summary

It would be prudent to seek the advice of equity release remortgage professionals on this basis, as the ERC’s would need building into the switch plans calculation. However, there are analysis tools available on the internet which can do a switch plans analysis for you. This will check your break-even point & highlight the whether it maybe worthwhile to remortgage to a new equity release lender or not, should Prudential not allow additional borrowing.

For a free analysis contact Compare Equity Release on 0800 678 5169 or visit their site by clicking here for their unique switch plans tool page.

Where Do I Find an Enhanced Equity Release Calculator UK?

Does an Enhanced Lifetime Mortgage Calculator UK Exist?

So what do equity release calculators do, and is there such a thing as an enhanced lifetime mortgage calculator UK?

Until a few years ago, a lifetime mortgage calculator was quite a novel application, only offered by a few select websites that allowed users to quickly calculate how much their equity release plan would endear them with as a tax-free cash lump sum. Today of course, there is no shortage of lifetime mortgage calculators on the internet, as most mortgage comparison and advice websites offer this useful application to users.

The next stage in the evolution of lifetime mortgage calculator was the introduction of the enhanced lifetime mortgage calculator on the internet. Of the four equity release companies that offer enhanced lifetime mortgages, (Aviva, Just Retirement, more2life & Partnership) an accurate enhanced calculator will pull the maximum release from each of these schemes & display these results.

An enhanced lifetime mortgage plan is basically a type of loan that allows you to access the equity tied up into your home, but takes your state of health into account. The mortgage is repaid when the property is sold, when the term of the plan ends, which is usually after you die or have moved into permanent care. At that stage, your beneficiaries will usually have 12 months to repay the lender, which invariably will come from the sale proceeds of the property.

There are different types of enhanced lifetime mortgage schemes UK, each with different lending and repayment criteria. Add to this the fact that each variable, including the applicant’s age, the value of the property, the amount needed to be released etc. determines how the loan is underwritten. The overriding factor with regards to the maximum enhanced release being possible is the severity of the health records. Basically, by completing a health & lifestyle questionnaire and answering the questions therein, will determine the effect it will have on the maximum equity release.

An enhanced lifetime mortgage calculator takes into account the type of equity release scheme, the lending terms of the particular provider, as well as the applicants’ variables such as age, property value, health and loan amount etc. to calculate how much the plan will cost.

An enhanced lifetime mortgage UK plan is different from a regular equity release scheme in that it has more generous terms of lending, based on certain special circumstances related to the life expectancy of the applicant. When it comes to a loan, the shorter the term of the loan, the lower is the risk for the lender. As such, in circumstances where the applicant has compromised health, a chronic illness, or a lifestyle that impinges on their life expectancy, lenders are able to lend at more generous terms.

In addition to offering the regular lifetime mortgage calculator, some equity release comparison websites also have the enhanced lifetime mortgage calculator. For instance, Equity Release Supermarket offers users the choice to get a quote for enhanced lifetime mortgage based on additional relevant information.

So why does an enhanced lifetime mortgage calculator UK need additional information? Because this is the information that it uses to project the expected term of the loan, which in turn determines the figures. The additional information is usually a simple health & lifestyle questionnaire with questions about your age, any serious illnesses, and any chronic health conditions you may suffer from.

The lifestyle questionnaire is used to find out whether any impairment one has will be acceptable to the lifetime mortgage companies to form the basis of any enhanced terms. These impairments or lifestyle choices that help qualify for the enhancements are as follows: –

You height, weight & for some lenders your body mass index (BMI)
Whether you smoke any form of tobacco e.g. 10 cigarettes per day for the last 10 years
Diagnosed with high blood pressure which needs medication
Entered hospital due to a heart attack, stroke or suffer from related illnesses such as angina
Struggle with diabetes requiring medication or even insulin
Diagnosed with cancer needing therapy (excludes certain skin related cancers)
Diagnosed with Parkinson’s disease or multiple sclerosis

Just retiring on the grounds of poor health can get you an enhancement or even the fact that you are taking prescription medication e.g. aspirin can help.

Therefore, similar to the underwriting of enhanced annuities, the equity release market has also embraced the more in-depth knowledge our insurance companies have in associating ill-health with financial products; equity release now being the latest.

But do not fear as there are websites that can help guide you to the relevant companies & tools you can employ that will provide you with the enhanced calculations to inform you of the difference any enhancement can make to the tax-free lump sum.

Where Can I Find Companies That Provide Equity Release Solutions?

Which Companies Can Provide Equity Release Solutions?

Equity release has seen a massive surge in popularity in the past few years. This growing demand has fuelled the sector and today we have more providers, with a wider portfolio of more flexible equity release plans than ever before. While equity release is not suitable for everyone, the variety of equity release plans means that it is certainly likely to be a suitable solution for a lot more people today than ever before.

Recent surveys have shown that a large number of pensioners are homeowners with a size-able amount of equity tied up in their homes are suffering from a credit crunch and are unable to fund their day-to-day expenditures or have no money for that big one-off expense. In other words, there are numerous people around the UK, who are property rich, but cash poor.

Such equity release solutions allow them a way to release some of the equity in their home in the form of conveniently usable cash. This money can be released either as a lump sum or in the form of irregular installments. The uniquely attractive feature of equity release plans is that they allow you to tap into the value in your home without the need to move out or sell the property. Irrespective of what type of equity release you choose, you can continue to live in your home until you die or move into long-term care.

Types of equity release solutions

There are two main types of equity release plans – home reversion schemes and lifetime mortgages. Home reversion involves selling a percentage of the house to the lender in exchange for the money. At the moment companies offering home reversion plans are Newlife Mortgages, Bridgewater Flexible Release Plan and Hodge’s Shared Growth option.

Lifetime mortgages offer the other type of equity release solutions – wherein instead of selling a part of the house, the lender sets up a secured 1^st legal charge on the property. There are also interest only lifetime mortgages where you can repay the interest monthly, thus maintaining a level balance on the loan. Such companies offering the interest only lifetime mortgage solution is Stonehaven with its range of Interest Select plans or more2life’s interest choice plan.

Latest product development

A recent innovation in this domain of interest repayment is from Hodge Lifetime with its flexible repayment lifetime mortgage. Although the repayments of interest cannot be on a monthly basis, Hodge Lifetime do allow upto 10% of the original amount borrowed to be repaid each year without penalty. Becoming a serious player now in the equity release marketplace, Hodge Lifetime have set down the gauntlet to other companies lacking in ingenuity and ideas with their current and future plans.

The most common form of equity release are the roll-up lifetime mortgages where the interest is added to the principle amount and compounded over time. This means that the debt effectively rises yearly for the rest of your life, until you either die or move into long-term care. Hence, before entering into one of these contracts you should always discuss your intentions with your family first & then arrange an Equity Release Adviser.

There are other types of equity release schemes which do include the drawdown lifetime mortgage such as Aviva’s Lifestyle Flexible Option, designed for those who want to have the option of borrowing more in the future without any obligations. For those who want the biggest lump sum, enhanced mortgages such as more2life’s Enhanced Lifetime Mortgage may be suitable, providing they meet the health & lifestyle questionnaire.

These are some examples of equity release solutions designed to suit different needs, and some companies that offer these products. There are, of course, many more providers within each sector. The best way to find a suitable deal is to compare different equity release plans, and seek independent advice from a qualified equity release adviser.

The Importance of an Equity Release Calculator