Tag Archives: Long Term Care

London Calling for Equity Release Pensioners to Cash in on Booming Housing Prices

Year to year, month to month, the housing sector changes which is good news for London property owners. It has been a buyer’s market in recent years as a consequence of the recession and housing prices falling due to the subprime mortgage issue. Now all of that is in the past and there is nowhere to go but up for many of the Capital housing values. If the 11 per cent price increase from 2013 to 2014 is any indication now is the time to take advantage of London equity release products such as lifetime mortgages and home reversion plans. Before getting to how a lifetime mortgage calculator can help determine if this is the right option, take a look at what the product can help you with.

Lifetime Mortgages Aim to Release Tax Free Cash
In a time where housing prices are increasing each month, there is no reason not to take advantage of financial products that can offer tax free cash in a lump sum. Across the UK prices have increased by 3.3 per cent just looking at the month to month figures. Many websites are reporting an 18 per cent increase from 2013 to 2014 in the London area when comparing last April with the most recent April. For individuals over 55 this means your house in London might be worth as much as 18 per cent more in value than it was last April 2013. From last month you might have 3.3 per cent more value in your home.

All this comes down to the total value of your home and the amount you would be able to release in equity. Consider if your home was worth £200,000 last year and it has increased to £225,000. On a sale you would have £25,000 extra equity. With a lifetime mortgage product you have an increased percentage of this equity that you can withdraw.

When you use a lifetime mortgage, you have the option of taking out a loan that does not require any repayment until you move out to a long term care location, a new property, or you die, hence the “lifetime” descriptive word. Equity is based on the value of your property, so if you have no loan then the total value of your property is what is available in equity.

With lifetime mortgages you can take a percentage which can never end up more than 100 per cent of the property value, at the end of the loan. In other words, when you use a lifetime mortgage calculator, & calculate on a roll-up basis, the principle loan amount plus the compounding interest over the life of the loan can never be more than the final value of the property. This guarantee is provided by all London equity release providers by way of a mandatory option, called the ‘no negative equity guarantee’.

The cash you take out is yours to do with what you wish and without tax consequences. It is simply swapping property for cash through a loan, which is why it avoids capital gains tax. Additionally, by working smart, if any means tested benefits are received schemes such as the drawdown lifetime mortgage plan can be used as a work around. By keeping savings levels under the £10,000 limit, no detriment will be afforded to means tested state benefits by taking smaller & regular chucks from the cash reserve facility.

Methods of Using Equity
The prime reasons Londoners over 55 are keen to take out lifetime mortgages, and you might wish to consider it, is how you can use the money. The money can be used anyway you wish, but more importantly it can be used to increase your home value exponentially.

Home improvements such as for a new roof, extending the home; upgrading the appliances, kitchen countertops, and making it more energy efficient are just some ways to increase your housing value. The more renovations you do towards making your home desirable for the next several years, the more it will continue to increase in value. There are certain home improvements that will matter very little to the value, so be aware of what truly increases the property and consider taking advantage of London equity releases.

Another top reason to take out a home equity release mortgage like the lifetime loan is children. Children and grandchildren more often than not, need financial help. Perhaps it is about paying for university for your son or daughter. Maybe your child needs to buy a house, but lacks a down payment. Whether you invest in a second home or help invest in your children’s educational future, it is an investment you can reap benefits from. A simple London equity release mortgage can solve many financial problems, but always seek professional equity release advice.

Advantages of Lifetime Loans
Not only do you get to use the money as you wish, but you can also increase the value in your home if you desire. The money is going to be tax free even if you decide to give a little gift to your children. As long as you keep your “gift” under a certain amount there is no capital gains tax or inheritance tax after seven years for them. You get to help them out and they get a little inheritance to enjoy while you are still alive.

Use a lifetime mortgage calculator to determine what you could release from your London property and start making plans today to enhance your retirement living standards.

Invest Time Finding an Equity Release Calculator to Determine the Maximum Release

When people have reached their retirement age, despite careful retirement planning, they may find that their income is not sufficient for their desired lifestyle or to cover plans for long term care. The prospect of costly long term care can be a worry for many retired people and few will have the level of income or savings to cover this eventuality. Equity release schemes can offer a potential solution for this dilemma and provide a lump sum, which can be used for any reason. However, many people are hesitant about consulting professional advice without knowing what is the maximum equity release sum available.

Find an Equity Release Calculator

If you have considered equity release, it can be worth investing the time to find an equity release calculator. This will help to determine the maximum release possible, which can allow you to explore whether this option would provide sufficient finance for your needs. The calculator will collate your details including your age, property value and current mortgage balance to provide an illustration of the schemes which could be best suited to your requirements.

Tailored Examples

A great number of calculators assist not only with what is the maximum equity release available, but can also provide tailored examples of the way in which you could choose to receive the funds. For people aged fifty-five and over, equity release provides a tax free sum. However, many schemes offer flexibility about whether you receive the funds in one lump sum or as flexible monthly payments. This can assist you in your retirement planning, and assist you in ensuring that you have not compromised your qualification for other forms of financial assistance that might be available to you. Since the equity release schemes are designed to run as a lifetime mortgage, this means that the loan balance only becomes due for repayment on death or if you move into long term car. At this time, the home is sold with the balance of loan being settled and any remaining funds are passed on to your beneficiaries.

Why Calculators Are Helpful

The equity release industry has flourished over the last few years, with new providers and household names now offering some great deals and schemes. However, it can be difficult to explore your available options and by calculating what is the maximum equity release, home owners can adequately make plans. These online tools can help to establish the limitations of equity release and provide figures to assist the decision making of whether or not to proceed. There are a number of online companies such as CompareEquityRelease.com, which offer different calculators showing the figures involved in conventional roll up plans and lifetime mortgages which are interest only. This enables a comparison to be made and helps in determining which schemes may be better suited to your needs.

Comparing equity release schemes can be challenging, but by finding a good online calculator, it can help you to make comparisons with just the click of a button. There are many independent companies, which offer calculators with access to the entire equity release market without any bias towards certain providers or products. This can help you to find the best possible deal and obtain real time figures to help you in your long term planning.

Help Taking the Next Step

Online tools such as equity release calculators can provide great help in taking the next step. Once you have determined what is the maximum equity release possible for your circumstances, you can then make an informed decision about whether you would like to proceed further. For many people, obtaining this figure can instantly provide information about whether equity release is feasible and optimal for their individual needs. This can save a great amount of time for those who would not qualify and enable those looking to apply, a clarification of the scope and possibilities offered.

Deciding to proceed with equity release can be a huge decision and the anonymity of online calculators allows home owners to explore their options without committing to an appointment with a broker. This can provide assurance that they are making the right decision and supply figures which can be used in discussions with their families. Equity release schemes can provide an excellent financial solution for a great number of retired people. However, it is a new financial commitment and it is important to understand what is the maximum equity release available for your circumstances in order to make informed choices. If you have considered equity release, it can be worth taking the time to find a good equity release calculator to determine your options and the size of release which could be available for you.

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!

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.