How to Calculate the Maximum Equity Release
Equity release plans can offer a flexible way to optimise your financial assets. With new, more secure equity release plans available today, it is possible to manage the amount of equity in your home exactly as you intend to; while also protecting your inheritance. But after all is said and done, equity release ultimately works by devaluing your main asset – your home.
While equity release plans do provide a valuable solution to many, it is not suitable for everyone. It can involve selling a portion of your home in the case of home reversion, and having a life-long mortgage secured on your property in case of lifetime mortgages, so there are many implications to be aware of that on the face of it may not be obvious. An equity release plan is therefore something that has a major effect, not only on your life but ultimately also for your beneficiaries. As such, it is important to be fully sure that it is the best possible way to help you achieve your goals.
Just enough for your needs
The starting point is to assess where you stand in relation to the amount you actually require. Therefore, a good way to do this is to calculate the maximum equity release that you can take in the context of your individual needs and circumstances. It would therefore be prudent to discuss what you actually need the extra cash for by itemising your expenditures. Not only this but are these expenditures ALL required during the initial spending phase? Some proposals may have longer term goals which can be set aside for now, others more immediate. These later life expenditures can be incorporated into the longer term goals of your plans.
However, by at least knowing the maximum release possible, you can then either build your spending plans to fit, or curb your expenditures to fit in with this budget provided by the online equity release calculator. The tool should be used for guidance purposes only and never literally so as to pin all your hopes on the outcome of its results. There are still many variables along the way that could still affect the ultimate goal, therefore prudence should be taken.
Often people who consider a release of equity think only about which equity release plans are available and which plan would suit them best. But the more fundamental question in reality is how much can they actually release with an equity release plan, and given the amount they can release, is equity release the right way for them to go?
An independent and qualified equity release adviser can ultimately offer you the best advice and guide you through the different options available. But using an equity release calculator to find out how the maximum you can release is the first step to finding out whether equity release can help you.
Maximum enhanced lifetime mortgage calculation
An equity release calculator requires you to enter your age and property value in order to work out how much money you could potentially release. Bear in mind however, that another determinant in calculating the maximum lifetime mortgage is due to one’s health conditions; both current and past. Therefore, of the best equity release calculators around, of the online varieties, the best will be able to afford to provide two sets of answers; one for a healthy person and the other for an enhanced lifetime mortgage customer.
As you can see the equity release market is evolving at a pace and the industry tools must keep pace with these changes. For this reason, an enhanced lifetime mortgage calculation should always be included in any set of results to ensure that the full picture is presented and those who are eligible to qualify for an enhanced product are aware of its benefits. This is where a full set of tools and advice from an independent source is essential for the calculation of the maximum equity release.
Getting an idea of the largest amount they could release at their age and given their property valuation, helps many people to decide whether equity release plans may be suitable for them, and whether equity release may even help them raise the amount they need!
Using an equity release calculator to calculate a maximum release is therefore the first step to finding out whether equity release is right for you.