Tag Archives: Equity Release Providers

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.

Will an Equity Release UK Calculator Work for People Aged Under 55?

Equity release plans offer flexible solutions for a common problem that many pensioners in the UK face today. Changing social circumstances have led to problems that we see increasingly more often in society today. Longer life expectancy, rising costs of living, probability of needing self-funded long-term care and shrinking pension funds mean that many older people face a severe cash crunch during retirement. While there is a problem of cash flow, many pensioners are homeowners with a hefty untapped equity built into their property. Equity release offers a way to tap into this equity without selling the house or moving.

Today, the UK equity release sector has expanded and offers more flexible and innovative plans than before. The industry and indeed its main voice – The Equity Release Council has admitted that more providers, concepts and flexibility are required to maintain the momentum equity release & lifetime mortgages have now found. It is also much more secure now, being regulated by the Financial Conduct Authority and following strict SHIP (now under the guise of the Equity Release Council) standards of service. As the demand for equity release has grown, so have the tools designed for potential customers to understand and negotiate their way around the equity release sector.

Mechanics of the equity release calculator UK

One such tool that could be invaluable is the equity release calculator UK as it offers a simple, quick and convenient way to calculate the maximum amount of money that could be released from your property. An equity release UK calculator takes into account the information that you provide, including your age and current valuation of your property to calculate this amount based on its database of available lifetime mortgage plans.

As such, an equity release calculator UK can only work within the set eligibility criteria of equity release plans. Most equity release plans are only available to people 55 years or over. This means that the equity release calculator can only accept age values that are 55 or above. Many equity release calculators have a lower limit of 55 on their age menu, but some don’t. In any case, an equity release calculator will not work if one enters an age value of lower than 55 years or higher than 100 years! Most sites will default to a minimum age of 55 to ensure calculations are correct.

Could equity release be a possible to the under 55′s?

Whether one day the UK equity release mortgage market will accept lower ages than 55 is yet to be seen. The problem with accepting an age below 55 is the protection provided by the ‘no negative equity release guarantee’. This ensures that at the end of the day the beneficiaries will never end up owing any more than the sale price of the property upon death or moving into long-term care. The cost of this guarantee has to met and is paid for by the customer by way of a slight increase in the equity release interest rate. With no guarantee in place, then we would see lower interest rates in this sector.

However, upon meeting the standards laid down by the Equity Release Council, all equity release companies must facilitate this feature within their schemes; otherwise their scheme cannot meet the SHIP criteria. This is a mandatory requirement and has helped the industry build confidence back up within the equity release mortgage market.

Therefore, until these issues are addressed there are currently no equity release schemes for people under 55 years offered by any of the mainstream equity release providers that are certified by the Equity Release Council. Equity release UK is a good way to raise money to meet pressing demands, but releasing equity impacts your entire life savings and potential inheritance of your beneficiaries so it is always advisable to consider it very carefully – especially if you’re young and expect to live long. P.S. Don’t we all!

How Does the Aviva Equity Release Calculator Compare to Independent Equity Release Calculations?

An equity release calculator is meant to calculate the maximum release equity that you could potentially release from your property. While only a few companies offered an equity release calculator until a few years ago, today, most independent advice companies, as well as providers, have followed suit and offer equity release calculators on their respective websites. So when using an equity release calculator, is it better to go directly to a provider, or use an independent calculator from the whole of the equity release market?

The best way to get the most out of an application such as an equity release calculator is to have a calculator that provides a free and simple way to calculate maximum potential release, and gives up-to-date and impartial results. However, specific equity release providers such as Aviva are bound to have only their own products on the database of their calculator, and can therefore show a very limited picture of what could be available to you.

The point of an equity release calculator is to get a fair idea of the most you could get and this is in essence a way to shop around and find the highest possibility in terms of equity release. Therefore going to only one single provider for this seems to beat the entire purpose of the exercise! It is important to use an independent equity release calculator that can sift through its database and give you up-to-date and impartial results.

The cons of using Aviva’s equity release calculator

As an example, consider that you live in a flat and use the Aviva equity release calculator. Simply on knowing that you live in a flat, the Aviva will immediately make a deduction of 15% in the valuation before making a calculation, and use only 85% of the entire valuation. An independent equity release calculator will never make such a deduction at the start of the calculation. It will address this issue by using the maximum loan to value figure from the entire equity release market. Not all lenders use this ruling and therefore the importance of independence shines through.

Another example of the negative aspect of using the Aviva equity release calculator would be the locality of the property. Using modern sourcing systems including Environment Agency data flood check risks, Aviva will accept or decline a property on this basis. Only a couple of other equity release providers will use this data in accepting or declining equity release applications. Therefore, the majority of lenders that do not use these criteria maybe could be the best route for an equity release calculation. Again, evidently independence wins the day over tied equity release providers.

An independent equity release calculator has the advantage of having access to all the information that is available, as opposed to concentrating only on one single provider. By using an independent equity release calculator, you could also potentially get a much better deal. For instance an independent equity release adviser will have Aviva rates starting from 5.62%, while Aviva’s direct rate is nearer 6%!

Aviva direct closed its salesforce

In fact Aviva has price differentials for those people who contact them directly. Should you contact Aviva regarding making an equity release enquiry, you cannot get assistance from any of their direct sales force – it has been closed down on 1^st July 2013. Aviva now will farm you out to three separate equity release brokers, but not with the benefit of the independents interest rate, but a higher rate than other specialist equity release brokerages such as Equity Release Supermarket get. This effectively means that the long-term cost of seeking advice from Aviva Direct now is higher than going to one of the independent equity release brokerages.

Another significant benefit of using an independent equity release calculator is that you could have access to attractive deals and offers, such as up to £1000 cash-back deals, as well as free valuations which Aviva directly themselves do not offer currently. So not only will there be a lower interest rate, but going to someone like Equity Release Supermarket will save on your initial set up costs.

In summary, Aviva, although are one of the better equity release companies, going directly to Aviva maybe does not offer the best terms. Going to an independent resource could provide you with exactly the same product which is the Aviva Flexi Plan, albeit on preferential terms by using an independent equity release calculator and adviser.

How Can the Proceeds from Equity Release Schemes Be Spent?

There are two main reasons why equity has caught on and become increasingly popular in the past few years. Firstly, it allows homeowners to access the cash value of their asset without having to sell it or move out, and secondly, there are no constraints placed by equity release providers on how the money can be spent.

Different people have different reasons for wanting to release equity from their home. Most equity release schemes allow for release either options in the form of a single lump sum or as regular withdrawals from a drawdown facility which can then be utilised as an income. This makes it a flexible option for people with a variety of needs, whether it is someone who needs cash for funding a holiday or someone who needs a supplementary income during retirement.

Having said that, it is important to note that there are some things outlined in the equity release plan contract that one cannot do, for instance make major alterations to the property that could have a significant impact on its value etc. Also, should anyone else move into the property, then the lender needs informing. The lender with then require an equity release waiver form must be signed by the new occupant so as to waive their rights behind the lenders, in case the main party died in the meantime.

In such situations it is always advisable to check with the lender beforehand to gain acceptance of the plans, otherwise should the lender find out any other way you could be in breach of the equity release terms and conditions.

Check the alternatives

Equity release is a flexible tool that allows people to use the released money to meet their individual goals. The key factor in deciding whether one needs to release equity from their property to meet these goals is whether there are other options that could help you achieve the same aims. Therefore, it is the duty of the lifetime mortgage adviser to consider all the alternative solutions that may exist before proceeding with any recommendation for an equity release scheme.

Once these alternatives have been eliminated it is only then that your lifetime mortgage financial adviser can then help you understand if equity release is the best way for you to meet your needs and attain your goals. Discussing your goals with your adviser can also help you understand if there could be another better way to achieve the same thing without incurring the same risks.

For instance, has your adviser consider ALL of the following: –

Would you be better off downsizing to a smaller property instead of releasing equity?
Could you use any existing savings or investments before taking any release of equity?
Be eligible for any means tested benefits that could help you?
Ask your children or relatives for financial assistance?
If home improvements are planned, are there any grants available that could cover the costs?
Consider other types of finance such as personal loans, credit cards, hire purchase, interest only mortgage?
Take in a lodger which could provide a source of extra income?
Reduce one’s expenses to provide additional disposable income?

A financial adviser could help you explore all the possible options and find the optimum solution.

For those who find that equity release is the best option for them, there are many ways in which the released equity can be used and there are no constraints on how the money can be spent. As mentioned above, everyone has their individual reasons for releasing equity, but some popular uses for released equity include a cash gift to the kids or grandchildren, funding a holiday, home improvement works, a new car, repaying an existing mortgage or debt consolidation or even buying a second property such as a holiday home.

Equity release schemes provide the freedom to carry out your long-term desires, something that wouldn’t have otherwise have been possible. However, there is always a word of caution which is that equity release schemes are not suitable for everyone & do come with a health warning – it will reduce your inheritance!

How Can I Use an Equity Release Calculator to Find the Best Lifetime Mortgage?

Equity release plans are a type of loan that allows property owners to withdraw money from their residential home. These loans, in previous years, were just for property owners that were over 65 years of age and older. However, today, the equity release providers have tended to offer the loans to property owners of 55 or more.

Equity release schemes are a great means to acquire a lump sum of money or monthly payments. The advantage of the equity release loan is that typically, it does not have to be paid back until the time of the sale of the property, or the 2nd borrower passes away.

There are various sources to help property owners find the best equity release providers that offer the most competitive rates in the industry. Online is one of the simplest and most convenient means to find the many lifetime mortgage lenders. Some of these equity release providers utilise innovative tools for the property owner such as equity release calculators, which are a simple means to determine just how much equity you can withdraw from your main residence. The advantage of the equity release calculators on the various websites is that you are able to shop, compare equity release deals and get a general idea of the maximum release of equity lenders will offer.

How do equity release calculators work?

Equity release calculators are convenient and completely confidential. The better equity release calculators can provide two maximum lump sum calculations. The reason being that the roll-up lifetime mortgages can be based on a healthy & an enhanced lifetime mortgage rate.

For example a single male, age 65 & in good health would be able to raise a maximum of 30% of the property value with Aviva on their Lump Sum Max plan. However, should the same male suffer from a history of poor health such as high blood pressure, taking mediation, heart trouble or cancer then the maximum release could rise to 38.5%. On a property value of £250,000 this could equate to an additional £21,250 in borrowing power.

Beware of imitations

A good equity release calculator will provide these two figures accurately & under no obligation. So beware of some equity release brokers offering a calculator where they will try & request your personal details in order for some sales person to then contact you. These calculations should provide you with answers not have to necessarily having to come from an adviser.

The mechanics of an equity release calculator

The calculators are very simple to use. The property owner is only required to input simple information that is specific to their existing property, such as their ages, current property value, and any outstanding mortgage amount. Within seconds of submitting these details the results should be published. Websites such as EquityReleaseCalculator.net provide equity release calculators that can offer three sets of results on their one site: –

Standard roll-up lifetime mortgage maximum lump sum
Enhanced (impaired life) maximum roll-up lifetime mortgage
Interest only lifetime mortgage maximum lump sum

When a homeowner decides on a UK equity release scheme, they should ensure that the lender they are dealing with is Financial Conduct Authority (FCA) accredited and that the loans that they offer meet the FCA guidelines and regulations. This provides the property owner with the assurance that they receive a safe and fair loan and that the company is trained in FCA regulations. Additionally, all schemes they deal with should be members of the Equity Release Council (formerly SHIP) which provides extra safeguards such as the no-negative equity guarantee, early repayment ability & moving house option.

Summary

If you are at the early stages of equity release research & looking for the best deals, you need to now firstly whether you can actually borrow the amount required. Look for an independent equity release adviser such as the Compare Equity Release company with nationwide financial advisers. Once the optimum lump sum is established they can then source the best equity release deals in the whole of the market.

If you wish for a calculation then Compare Equity Release are available on 0800 678 5169.