Tag Archives: Home Reversion

Compare the Best Equity Release Calculators to Find the Road to Financial Freedom

You want to be finally set for your retirement years. Most people do. Sometimes the best laid plans do not work out. For example you might have a retirement fund, but it got hit severely with stock market issues. You may have needed to use some funds to help out your children or grandchildren. The point is you are here because you want to have financial freedom and hope that the best equity release calculators can help you. Yet, you might be hesitant to even use the calculators online when you see what they ask for. Find out how to differentiate the best calculators from those that are data mining.

Does the Website Look Professional?
Some websites look more professional than others even when dealing with equity release calculators. There are several ways you can tell whether the website is actually a decent information site and worthy of your attention. The first thing you want to do is look at the ‘About Us’ page. If the page offers an exact date for when the website was launched, plus a decent history of the company or people running the site you can trust they are professional. Take a look at their blog, news, or article area to see what types of information they provide to you. Is the writing on the site professional or filled with grammatical errors one after another? Do you learn something from the content of the site or is it just marketing? A professional site will have more than looks it will have depth in all areas as well as provide you the data you want to know from the calculator.

Are Equity Release Websites Just Acquiring Your Data?
A part of determine whether a website is worthy of your information for calculating potential equity release amounts is the data and information you are asked for. For example, say you pull up a website and all it has on the home page is the calculator asking for your name, phone, email, address, sex, age, and property value. There is also a field to fill out with contact information to log-in or sign-up, but there is no information given to you about how the calculator works or what it will provide. This type of site is just asking for your data and not giving you information in return. An equity release calculator should work both ways – provide the calculation you require to establish the maximum release of equity and for the equity release broker to have a chance to discuss the potential of doing your business with one of their equity release advisers.

Are Mandatory Fields Relevant to the Information you Want?
You want certain information. In fact you want to know if you can afford to take out equity from your home, whether it is in the form of a lifetime mortgage or home reversion. You ultimately want to get results from the data you input. This goes along with separating data mining sites out from the information sites. If the mandatory fields as just about your name, email, and telephone and not about your age, health, and property value the site is just trying to get your information. Another consideration is if you fill out the mandatory information with fake data do you still get results from the calculator. This is a great way to test the site.

Some sites are extremely smart and know when you have not entered a proper name, email, or telephone number. For instance if you put xxxxxx xxxxx for your first and last name plus xxxxx@xxxx.com and 010000000 for the telephone number and you receive results they are not data mining, but trying to give accurate estimates of your lifetime mortgage options. If the site says you have not provided correct data in the mandatory fields and withhold the calculation result it is a data mining site.

Is the Website just Marketing Equity Releases?
When a website is just trying to market to you it means they are data mining. They are trying to get your information so they can market to you and what your interests are rather than supply you with relevant accurate details. Always check their privacy policy and T&C’s to see if this is genuinely allowed.

A good website is going to work for your and the other side. Each party will provide information that is helpful to the other person. For the website they get marketing details and learn what you are most interested in as a means of sending you information based on your needs. You get the data results you wanted to see, in other words the calculation of loan to value the company or companies are willing to provide you with for equity. Since you made an enquiry the website can then make their enquiry and help answer any questions you might have about the results.

The Results
The equity release results you receive from the equity release calculator can help you find the solution you are looking for with regards to your financial needs. You know what you hope to gain from an equity release mortgage or at least you have a basic idea. You want enough funds to live your life comfortably. You know whether there are health issues that may require you to sell your home and seek assisted living. You understand what your current retirement funding offers and if you wish to provide your children and grandchildren with their inheritance while you are still alive.

The results can tell you what is possible. It will not tell you how you can use it or give you a “set in stone” loan to value result. This is an important distinction when talking about calculators. You cannot believe that the results you receive are wholly accurate and will not change. A lot of factors can affect the results you received from the calculator. You use the results to your advantage & gain a sense of perspective as to how much you can look forward to achieving in your retirement.

For instance, if you ball-parked the property value based on current home sales found on Zoopla you could be out by £50,000 either over or under valuing your property. This means the estimate of available funds will also be over or under the actual amount a company can truly provide you. This is where finding a professional website with helpful advisers can come in handy, particularly when you are ready to talk numbers and potential lifetime mortgages.

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Is an Enhanced Equity Release Calculator Available Yet?

Enhanced equity release calculator tools are available online. These calculators are specific to the enhanced, impaired, or ill health lifetime mortgage schemes on the market rather than home reversion or other lifetime mortgage products. Given the specific nature of these mortgages, the calculator has to take into account more information than the standard lifetime mortgage.

History of Enhanced Equity Release Plans
A decade ago enhanced equity release plans were on the market through Hodge Lifetime and Partnership Assurance. They provided enhanced options through home reversion plans. However, with changes made by the then Financial Services Authority, now the Financial Conduct Authority, the plans were discontinued, leaving the market without any enhanced home reversion or lifetime mortgage schemes.

In more recent years, new lenders have joined the market offering enhanced lifetime mortgage plans. Partnership re-entered followed by new companies like More2Life, Aviva, and Just Retirement. By new we mean new to the enhanced equity release plan, and not necessarily to the market as a whole.

Following the principles of enhanced annuity, enhanced or impaired equity release schemes use health as a way to provide the maximum equity release amount, which is where the enhanced equity release calculator comes in. Be aware that the more severe the illness is the greater the maximum equity amount will be.

Lenders Supplying Tools
Some brokerages and websites have developed the enhanced equity release calculator to help supply the maximum lump sum an individual may be able to take out of their home. Unfortunately, accuracy is difficult to predict due to the myriad questions on the health and lifestyle questionnaire which determines a person’s life expectancy. This questionnaire is coupled with a mortality indices table based on age and illness to give an applicable value.

This means the calculator is designed to give you the maximum amount based on the worst case scenario. You may or may not be a person in the worst case scenario, but that is the result you will get, therefore, you need to speak with a broker before deciding if this loan is truly right for you.

What can Brokers Do?
An independent financial broker specialising in equity release schemes should be contacted once you have a beginning figure for an enhanced equity release product. The adviser will take the enquiry beyond the standard calculator questions to see if there are any other factors that could release the maximum lump sum or if you will only be able to get a smaller amount. The enquiry is based on a Key Facts Illustration (quote) from relevant providers in the market.

A broker is able to discuss your situation with financial companies lending the money for lifetime mortgages. They can discuss whether there are other factors that might release more or see what current products are available to you.

You should be aware that even if something is advertised on TV, the Internet, radio, or through a calculator calculation, you may not be able to get that same product. This is where the broker comes in. They have resources you do not have available.

Why Use the Calculator
You are probably asking why you should use the calculator at all if you still have to speak with a broker. The main reason to use it is to see the potential maximum lump sum. If the maximum lump sum is not anywhere close to the funds you hope to unlock, it gives you an idea of whether lifetime mortgages and other equity release products are right for you.

Additionally, it tells you whether your ill health is a qualifying factor to release more equity than a standard lump sum. It might be a guide number that results, but it does prove whether going on to the next step and speaking with a broker is worth your time.

While the value might change to a lower one, the original calculation result gives you enough of an answer to get started. There are also times when the calculator is not giving you a high enough number because you have multiple health factors. If you can find a maximum lump sum that works for you based on what you input into a calculator and a broker can get more released it might work out better for you. Of course, as you use the enhanced equity release calculator, you do need to remember it is only an estimate. You always want to speak with a qualified professional who is independent to ensure you are getting the very best product for you.

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What Results does an Online Equity Release Calculator Show?

An online equity release calculator is pretty smart now that we have a good number of technology and website designers willing to provide you with as much information as you can get all from one site. You can get up to four results using an equity release calculator. Some websites may offer only one; another might offer lifetime mortgage standards versus home reversion; while the last one you visit offers up to three. The results you may receive will be explained, but first be wary.

Most websites are trying to get your information. They want to look at the results for marketing purposes, as well as to get you on the phone or via email to sell you their product, versus one of the other company’s on the market. You will want to be careful who you give your information to. Make certain you trust the website and avoid any that say they will show you the results in the next step. In reality, all the calculator needs to know is your age and your home value.

Home Reversion Determiners
Home reversion is a sale of a home you own. It has to be your primary home or at least the home you use as your main residence. You must be 65 years of age. You cannot have a mortgage outstanding on the home or some companies will allow you to use the home reversion funds you receive to pay it off.

The idea is that you live rent free under a lifetime tenancy agreement in your home until death. If you need to leave the home, you will sell the remaining part and you cannot move back in. The home is sold in full to the buyer, a home reversion company. This company offers you a percentage for the home based on the full value of the home, less the percentage they consider as their investment. You never receive full value for the home whether you sell in part or full. The idea is that the money you are given, less the full value, is the investment the company gains from you plus any appreciation that occurs while you are living in the home. If the house is not sold in full and it appreciates you benefit too.

So the older you are, the higher the percentage you gain in funds on the premise that the investment will not be outstanding for as long. There is no interest involved.

Lifetime Mortgage Determiners
For an online equity release calculator offering lifetime mortgage results, there are differences from a home reversion calculator including the fact that you are now dealing with interest. It is not a percentage of the home you decide to sell, but a percentage you can gain in return for making a capital lump sum payment, plus interest at your death or when you decide to sell and move out of the house.

If you are in perfect health, you will want to use the standard ER model as this shows you what a healthy adult, at your age, with your home value, can get as a maximum capital sum.

A person that is in ill health is expected to die earlier than most, which means they will pay back the loan quicker and thus the investment is not outstanding for as long. With interest accrual to factor in and a company wanting to make as much as possible, they are willing to increase the lump sum awarded due to your lower life expectancy.

The third type of result is with an interest only mortgage. This is provided to borrowers who have money to make a monthly payment. The payment is only the interest accruing in a month based on an APR. It keeps the capital lump sum the same throughout the loan. Again, age and home value factor in. With an interest only loan there is concern over the individual being able to keep paying on the mortgage, so usually the amount is lower. It leaves the option of converting to a standard lump sum product open for the future.

Do Your Research and Get Armed with Information
There is nothing better than being armed with information when you go to speak with an independent broker regarding possible products and actual maximum amounts available to you. Always remember the online equity release calculator provides an estimate to use as a guide. It simply states whether it is possible to get a loan at affordable terms for your retirement, versus something that is not feasible.

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Which is the Best Equity Release Plan?

When it comes to deciding which is the best equity release plan that is suitable, it can be difficult without the required knowledge. It is always best to seek independent financial advice to find out which plan is the best for you. When choosing a plan, consider if you are looking for a low interest rate, the ability to make partial repayments, a guaranteed inheritance for your children, or just the maximum lump sum.

One Company Offering Comparisons
Equity Release Supermarket is an online company that will show you which equity release plans to choose from. They provide a comparison table of plans and products that will help make your search easier. The plans include drawdown, home reversion, lump sum, and interest only mortgages. In addition, they can provide an advisory service and have the facility to provide an appointment with a local adviser, either in the comfort of your own home or over the telephone, dependent upon which ever suits your requirements best.

Exploring Details of Lifetime Mortgages and Home Reversion
A drawdown equity release is similar to a lump sum lifetime mortgage, except that you only need to take only the amount of money that you will need. That way you do not eliminate all of the equity in your home at one time. A lifetime mortgage allows you to receive the maximum amount that your home is worth at one time. A home reversion allows you to borrow any amount from the equity of your home by selling a proportion of the house value. For instance, by borrowing half you will allow your children to inherit a piece of the property when you pass away.

An Alternative Lifetime Mortgage
The only equity release plan that you will need to make monthly payments while living in the home is an interest only lifetime mortgage. This type of plan is good to get if you want your children to have as much equity as possible when you pass away. One of the few companies to offer such a product is Stonehaven, who restrict borrowers to a minimum age of 55. Most other interest only lifetime mortgage lenders such as Halifax, who operated their Halifax Retirement Home Plan, have now withdrawn from the market.

How Equity Release Works In Principle
With most of the equity release plans you do not need to make monthly payments. In fact, you can live in your home for free until you pass away or go into a nursing home. The interest that accumulates on the loan for the remainder of its term and will eventually be repaid once you pass away or go in a nursing home.

You decide which product is correct for you, whether you want to make a monthly interest payment or no payment at all. The benefit is that you get the money you require now to make your retirement easier. The disadvantage is the amount of inheritance you can leave behind. This is why you should be aware of how lifetime mortgages and home reversions work.

First of all the money is tax free and can be used at your discretion for home improvements, repairs, or even holidays. Under home reversion you have already sold a portion of your home so you have less worry of paying something back and a lifetime tenancy agreement. For many this is uncomfortable, but it affords that inheritance as mentioned. You also have to be 65 to start this process, whereas lifetime mortgages can start from as early as 55.

Speaking with Family
An independent financial adviser is great, but you also need to be wary about what your family will think. As it is their inheritance and they may be able to help you keep the home in the family, it is important to get their opinion. They may see something you missed or simply help you sign a better contract.

For example, with lifetime mortgages there is a clause called a ‘no negative equity guarantee’ agreement in which the company cannot try to obtain any more than the house is worth upon your death or decision to sell. It protects you if the house loses value.

A homeowner may have an idea on which equity release plan they want, but it is still best to contact an independent financial adviser, to make sure you are making the right choice. One plan may be better for you than the others. The independent adviser will ask you a series of questions to help you choose the best plan. So, if you have any questions, ringing Equity Release Supermarket on 0800 678 5159 maybe your best option.

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How to Calculate the Maximum Equity Release

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.