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.
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.