Tag Archives: Equity Release Sector

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!

What Are Your Top Key Retirement Solutions?

The Top 18 Equity Release Key Retirement Solutions

As people live for longer and the cost of living increases, it is becoming more and more common for retirees to have financial difficulties during old age. However, a lot of these issues actually arose many years prior to this event, blatantly due to lack of financial planning prior to retirement.

As such, financial planning during retirement has become more important than ever before as managing on a limited budget, fault or no fault of one’s own is a harsh reality for many baby boomers. Therefore, an increasing number of people are looking for flexible ways to get the best value from their existing financial assets in order to address this retirement issue.

The rising popularity of equity release schemes illustrate how much of a growing problem financial insecurity is for many people in retirement. These type of home equity loans offer exactly this type of key retirement solutions many people seek as they usually have no effect on their monthly outgoings.

Let’s look at some of the most significant facts surrounding an equity release mortgage:

Equity release plans allow you to release some of the equity built into your home as usable cash. Both home reversion & lifetime mortgages allow you to do this without the need to sell the house or move out. So, even as you use some of the value of your property, you can continue to live in the house until the end of life, or until you move into a long-term care home
There are two main types of equity release plans – lifetime mortgages and home reversion plans. Lifetime mortgages are like regular mortgages, but only available to people over the age of 55, and have no fixed term. They allow you to release a lump sum of equity from your property which even then remains 100% in your own name. There are usually no monthly payments and the interest charged is added to loan & compounds on a monthly or annual basis. This differs from a home reversion plan where you actually sell a percentage of the property to the reversion provider. In return they provide a tax-free lump sum & a lifetime tenancy agreement is made. Both mortgages will then run on until the end of life, or until you move into care. Most lenders provide a window of 12 months to then sell the property so that the equity release mortgage can be paid off.
A home equity loan calculator can be useful to find out how much equity will be built into your home after a certain period of time. A home equity loan calculator can be useful in a variety of scenarios and is available on a number of financial, comparison and advice websites. A home equity loan calculator is not the same as an equity release calculator and is designed to give you a slightly different information calculus.
A home equity calculator will need some basic information about your property, including the current value of the property, its location, and the yearly rise and fall in the property, in order to work out the equity built into your home. A home equity calculator is therefore a way to calculate simply the amount of equity expected to be built into your home over a certain period of time.
However, an online equity release calculator is a different tool in that it can calculate how much equity one could potentially release from their property. An online equity release calculator UK therefore needs to work out the maximum amount an equity release mortgage provider could potentially afford to lend, based on the expected term of the loan, and the value of your home.
A free equity release calculator is therefore likely to require some basic information about you and your property in order to provide such a calculation. This includes, the age of the youngest enquirer and the current valuation of the property. The free equity release calculator can use this information and based on its database of equity release plans available, can give you a fairly good idea of the maximum release available to you.
An equity release calculator is an application designed specifically to calculate maximum potential release of equity, but there are many other financial tools designed to calculate different things. For instance, there are mortgage repayment calculators that, based on the loan amount, the rate of interest, and term of the loan can calculate how much your payments will be.
There is also a general lifetime mortgage calculator based on the age and income of the enquirer which can work out how much they could potentially borrow. Newer calculus allows some more advanced equity release brokerage’s to offer the interest only mortgage calculator which requires slightly more information such as income details, and details of any adverse credit, in order to ascertain eligibility.
A lifetime mortgage calculator is therefore just one of the many calculation tools available today within the mortgage sector. Depending on what type of application you are using, you may be needed to enter different information relating to your age, health and property, which is relevant to that particular calculation.
Home equity loans provide one of the key retirement solutions to happiness in retirement. There are different borrowing allowances from all the equity release companies, therefore always consult a home loans specialist who can advise on the many forms of home equity mortgages available.
Home reversion equity release plans involve selling a proportion of your home to the equity release lender. There are no monthly repayments with home reversion plans, and the entire amount is recovered when the house is sold, when the proportional share of the equity goes to the lender.
All equity release plans today come with a no negative equity guarantee, which means that your beneficiaries never have to pay anything to the lender even if the equity release loan gets bigger than the property value. This no negative equity guarantee is provided free of charge by the equity release companies, however it is costed into the overall costs and charges of the plan. Should the guarantee not be provided however, the interest rates would be lower on equity release schemes. Therefore any implication of it being free is not entirely true.
Equity release plans are regulated by the FCA (Financial Conduct Authority) and the Equity Release Council (ERC) is the industry trade body that represents everyone that works in the sector, including qualified advisers, providers, lawyers, solicitors etc. Membership of the FCA is mandatory as they provide the licence upon which advisers are able to provide equity release advice. However, membership of the Equity Release Council is not mandatory for advisers or solicitors, however it is for the mortgage providers who offer lifetime mortgage & home reversion products.
Recent research has shown that over 80% of the country’s wealth belongs to people over the age of 60, with over £1 trillion in untapped equity. It also shows that many homeowners over the age of 60 have cash flow problems, and are in fact unable to meet their daily costs. The simple equation for their key retirement solutions lies in the equity tied up in their home. Equity release schemes therefore provides one type of solution, however many such as downsizing property still remain & consequently should always be considered.
According to a recent study by the leading charity Age UK, the two most common ways that people were using their released equity were – home repair or maintenance projects at 46% and paying off existing debts at 35%. Following this statistic come the other lesser reasons to release equity in retirement. These would include holidays, new car, caravan, holiday home, financial assistance for the children, long-term care costs or to create an emergency fund in the bank.
Equity release plans have become increasingly popular after the Financial Services Authority (now FCA) started regulating the equity release sector. This initially started with the regulation of lifetime mortgages in 2004, which later then incorporated home reversion plans from April 2007. All advisers practicing in equity release must have the appropriate qualifications either through the CII (The Chartered Insurance Institute) or the IFS (Institute of Financial Services).
There are a number of independent and comparison websites that offer qualified advice about equity release products, and help users understand which equity release plan could suit them best. Search engines, such as Google, Bing or Yahoo will help you search for any related equity release information needed to enable you to conduct your own research. However, even if you decide which equity release scheme you require you would be unable to go direct to the lender as plans can only be completed by qualified advisers. This offers protection to the lenders to ensure the correct plan is taken out.
The latest type of new equity release mortgage to be invented is the enhanced lifetime mortgage where health can affect the maximum loan you can borrow. Therefore, equity release underwriters assess an enhanced lifetime mortgage as they do with an enhanced annuity plan where a health and lifestyle questionnaire is completed. Depending on the answers & severity of the health conditions, will determine the amount they will lend out. Simply put, the worse the state of health, the greater the maximum release.

There are many facts on equity release offering more concepts for key retirement solutions, as well as about how and why equity release plans have become so popular recently. They also talk about different types of equity release plans that are currently available. For more information visit independent advice websites or consult a qualified equity release adviser.

What is the Formula for a Home Reversion Plan Calculator?

What is the Formula for a Home Reversion Plan Calculation?

Equity release schemes have seen a massive surge in popularity in recent years with figures continuing to rise in 2013. Year to date figures for October shows there has been over £800 million of new equity release funds released, and is set to reach an all-time high of possibly £1 billion by year-end.

This will be a landmark for the equity release industry after years of care in building its reputation through regulation, financial advice and more innovation in product design from the equity release companies themselves. The main growth area in the types of equity release schemes available has been in the field of lifetime mortgage schemes market. Nevertheless, it is the home reversion plans the London equity release mortgage market has to thank. For this is how back in the 1960’s when the former property equity release schemes were invented.

Why the decline in home reversion sales?

Home reversion schemes in comparison to lifetime mortgages have not seen much change in design or structure since their inception. In fact less than 1% of all equity release schemes written in Q3 of 2013 were a home reversion plan! So what is the reason for their significant decline? One word – Flexibility.

Within the equity release sector, there have been products such as home reversion plans that have lost out to other more flexible and secure options that are now becoming available. Flexible terms of lending such as new interest only lifetime mortgages and the enhanced lifetime mortgage UK are now more popular & freely available. Where a release of equity is necessary and advice is required more than 9 times out of 10 advisers will favour lifetime mortgages & for this reason they have effectively made home reversion plans near obsolete.

After all, demand creates supply, and there seems to be little demand for home reversion schemes on the whole. This is perhaps the reason why several companies that used to have a home reversion calculator have now withdrawn the application from their website.

Where can I find a home reversion calculator?

Old home reversion companies of the past had tools such as a home reversion plan calculator which could help people over the age of 65 assess the maximum they could borrow. Two such companies were Retirement Plus of which they provided the data for companies like Equity Release Supermarket to use on their own website.

Alas when Retirement Plus withdrew their hybrid home reversion/lifetime mortgage plan these calculators were pulled. Unfortunately this left a void in the market. More recently Bridgewater have provided a home reversion calculator for advisers to use, but is also accessible to the general public to use with the right-click!

There are some specific reasons for this decline in popularity. The first reason probably is that home reversion involves selling a part of your home, and not many people are comfortable with that thought. The main advantage of home reversion was that it involved no repayment over the loan term; however, with the arrival of flexible new interest only lifetime mortgages home reversion no longer offers something unique.

Advantages and disadvantages of home reversion plans UK

Another reason is perhaps that home reversion involves this selling a part of house at a highly discounted price, so that you not only lose out on the market value when you start the plan, but also do not benefit from any property price rise on that percentage of the equity when the house is finally sold.

Another significant drawback of home reversion plans is that in case you die early and the plan ends, you potentially lose a valuable chunk of your property in exchange for a highly subsidised price. This can be a big risk for your beneficiaries. But with certain new lifetime mortgages, you can get guaranteed inheritance protection in case of early closure, which is a significant improvement.

Home reversion plans are still very much available however, so there are clearly some advantages to these schemes and they suit some clients. They do offer a large lump sum release, there are no monthly repayments to be made, and by selling only a small portion of the home, you can still protect any inheritance you may wish to leave behind. However, enhanced lifetime mortgages available today can surpass the release allowed by home reversion schemes, and still allow you to retain full ownership of your home.

Home reversion summarised

Companies such as Retirement Plus, Aviva, Home and Capital, and Partnership did offer enhanced home reversion plans, which seem to have now been withdrawn. As stated historically, several reversion companies had home reversion calculators on their websites, but with the decline in demand for these schemes and the availability of new more flexible lifetime mortgages, it is difficult to find a home reversion plan calculator today.

However, the home reversion plan in the UK is not dead & buried and still must have a part to play in the overall equity release advice service offered by any qualified adviser.

You can calculator standard results on the best home reversion deals by visiting specialist equity release broker websites such as – www.homereversion.org