Tag Archives: Type of Equity Release Scheme

Where Do I Find an Enhanced Equity Release Calculator UK?

Does an Enhanced Lifetime Mortgage Calculator UK Exist?

So what do equity release calculators do, and is there such a thing as an enhanced lifetime mortgage calculator UK?

Until a few years ago, a lifetime mortgage calculator was quite a novel application, only offered by a few select websites that allowed users to quickly calculate how much their equity release plan would endear them with as a tax-free cash lump sum. Today of course, there is no shortage of lifetime mortgage calculators on the internet, as most mortgage comparison and advice websites offer this useful application to users.

The next stage in the evolution of lifetime mortgage calculator was the introduction of the enhanced lifetime mortgage calculator on the internet. Of the four equity release companies that offer enhanced lifetime mortgages, (Aviva, Just Retirement, more2life & Partnership) an accurate enhanced calculator will pull the maximum release from each of these schemes & display these results.

An enhanced lifetime mortgage plan is basically a type of loan that allows you to access the equity tied up into your home, but takes your state of health into account. The mortgage is repaid when the property is sold, when the term of the plan ends, which is usually after you die or have moved into permanent care. At that stage, your beneficiaries will usually have 12 months to repay the lender, which invariably will come from the sale proceeds of the property.

There are different types of enhanced lifetime mortgage schemes UK, each with different lending and repayment criteria. Add to this the fact that each variable, including the applicant’s age, the value of the property, the amount needed to be released etc. determines how the loan is underwritten. The overriding factor with regards to the maximum enhanced release being possible is the severity of the health records. Basically, by completing a health & lifestyle questionnaire and answering the questions therein, will determine the effect it will have on the maximum equity release.

An enhanced lifetime mortgage calculator takes into account the type of equity release scheme, the lending terms of the particular provider, as well as the applicants’ variables such as age, property value, health and loan amount etc. to calculate how much the plan will cost.

An enhanced lifetime mortgage UK plan is different from a regular equity release scheme in that it has more generous terms of lending, based on certain special circumstances related to the life expectancy of the applicant. When it comes to a loan, the shorter the term of the loan, the lower is the risk for the lender. As such, in circumstances where the applicant has compromised health, a chronic illness, or a lifestyle that impinges on their life expectancy, lenders are able to lend at more generous terms.

In addition to offering the regular lifetime mortgage calculator, some equity release comparison websites also have the enhanced lifetime mortgage calculator. For instance, Equity Release Supermarket offers users the choice to get a quote for enhanced lifetime mortgage based on additional relevant information.

So why does an enhanced lifetime mortgage calculator UK need additional information? Because this is the information that it uses to project the expected term of the loan, which in turn determines the figures. The additional information is usually a simple health & lifestyle questionnaire with questions about your age, any serious illnesses, and any chronic health conditions you may suffer from.

The lifestyle questionnaire is used to find out whether any impairment one has will be acceptable to the lifetime mortgage companies to form the basis of any enhanced terms. These impairments or lifestyle choices that help qualify for the enhancements are as follows: –

  • You height, weight & for some lenders your body mass index (BMI)
  • Whether you smoke any form of tobacco e.g. 10 cigarettes per day for the last 10 years
  • Diagnosed with high blood pressure which needs medication
  • Entered hospital due to a heart attack, stroke or suffer from related illnesses such as angina
  • Struggle with diabetes requiring medication or even insulin
  • Diagnosed with cancer needing therapy (excludes certain skin related cancers)
  • Diagnosed with Parkinson’s disease or multiple sclerosis

Just retiring on the grounds of poor health can get you an enhancement or even the fact that you are taking prescription medication e.g. aspirin can help.

Therefore, similar to the underwriting of enhanced annuities, the equity release market has also embraced the more in-depth knowledge our insurance companies have in associating ill-health with financial products; equity release now being the latest.

But do not fear as there are websites that can help guide you to the relevant companies & tools you can employ that will provide you with the enhanced calculations to inform you of the difference any enhancement can make to the tax-free lump sum.

 

 

 

What Facts Exist About Interest Only Lifetime Mortgage Calculators?

The Facts – Interest Only Lifetime Mortgage Calculators

An lifetime interest only mortgage calculator can be used to establish the maximum release possible from an ever increasingly popular type of equity release mortgage plan.

To recap, a lifetime interest only mortgage is a type of equity release scheme where you can actually make monthly or ad-hoc interest repayments. The principle loan amount does not need to be repaid each month and is only recovered at the end of the mortgage term, which is at the end of life, or when you move into permanent long-term care. At this point the property is sold, and the lender recovers the balance which usually should be within a 12 month period.

Interest only lifetime mortgages are becoming an increasingly popular type of equity release scheme due to the increasingly savvy over 55-year-old age group. Having grown up with a lifetime of mortgage debt, baby boomers reaching retirement now have much experience in how to manage mortgage debt & the associated monthly payments. Therefore, why when one gets to retirement why should this potential form of finance be pulled from their resources?

How does the interest only lifetime mortgage work?

Since you only need to repay the interest, these interest only lifetime mortgages work out to be more affordable for many people than regular residential mortgages. Another important factor that contributes to their popularity is that providing you make regular and full interest payments each month, the final balance on an interest only lifetime mortgage can remain level throughout the term of the loan. Great news for the kids!

Interest only lifetime mortgages, like regular equity release schemes, have no fixed term and involve no capital repayment. As such, the interest only calculations that decide the feasibility of such mortgages are quite different from regular equity release mortgages. As with any equity release plan or mortgage, there are certain fixed eligibility criteria for interest only lifetime mortgages with respect to age, valuation of property and affordability. These are the factors which are used to underwrite a loan of this type. While there are a number of websites offering equity release calculators, interest only lifetime mortgage calculators are only featured by companies offering niche products and advice who can invest in a specialist application such as this.

Interest only lifetime mortgage rates

An interest only lifetime mortgage calculator allows you to work out how much your mortgage would cost you, based on relevant variables including your age, property value, loan requirement, single or joint application and affordability of the applicants. The older you become the more you can borrow on the schemes with a maximum release of 50% of the property value. There are currently four providers in the market which offer interest only lifetime mortgages. These are Stonehaven, Hodge Lifetime, Holmesdale Building Society, and more2life. Obviously, each company has its own lending criteria, including minimum age for single applicants, joint applicants, minimum property value, minimum monthly payment, and each lifetime mortgage has different rates of interest starting from just 4.75% (5.1% APR) which is the Hodge Retirement Mortgage Plan.

The current minimum applicant age for Stonehaven, Hodge Lifetime and more2life interest only lifetime mortgages is 55 years, with a minimum property valuation starting from £70,000. The minimum age is 70 years for the Holmesdale Building Society lifetime mortgage. Since these are the set criteria for the mortgages, these also apply to their interest only lifetime mortgage calculators.

So, if you are looking into the possibility of equity release don’t always assume that your only option is a roll-up lifetime mortgage scheme. Has your adviser even asked whether you would like to make some form of monthly repayments? In fact Stonehaven & more2life even allow you to set your on monthly payment from as little as £25pm which helps fit in with monthly budgets. Remember to sit back & take stock before deciding.

Seek ALL available options as many people are these days are considering interest only lifetime mortgages or a retirement mortgage more commonly. If unsure & would like advice on your interest only lifetime mortgage options call 0800 471 4796.