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Archive for July, 2010

Equity Release Schemes – Live Your Life The Way You Want

Thursday, July 29th, 2010

Gone are the days when you needed to sell your property to unlock the equity in it.

Equity release schemes now give you an opportunity to stay in your home while you can still financially benefit from it. You can utilise the value of your home as a means to receive cash. This can be in one lump sum payment, lump sum & drawdown payments or in the form of regular monthly installments.

 

This new income source can be used in many different ways and is becoming quite popular among people of retirement age. The increasing costs of everyday living expenses puts financial pressure on particularly the retired population.

A lack of finance in retirement can to prevent us from living comfortably on a daily basis. This is when equity release schemes can fulfil their potential in offering homeowners the perfect option to enhance their lifestyles & enjoy life.

You may want to carry out home improvements, lighten some of your financial burden or just spend some more time fulfilling leisure pursuits such as holiday breaks or even worldwide cruises. Equity release schemes enable you to live out all your dreams. The money you get from the equity release scheme can be spent in the way you want. Obviously, this is where independent equity release advice is important.

 

People often want to release the maximum possible from an equity release scheme & invest the proceeds. However this invariably is not the best option.

With the lowest equity release interest rates around 6.5%, by taking a large release from the property in the current econmic climate, it would be impossible (unless excessive risk was taken) that one could obtain the same 6.5% return.

Therefore, it is not good advice to take a large tax free lump sum from an equity release scheme just for investment purposes.

 

A more cost effective way of achieving this goal of increasing your income could be by a drawdown equity release scheme. This scheme would enable an overall cash facility to be provided by the lender. From this facility, an initial tax free lump sum can be withdrawn, leaving the unused facility with the equity release lender that can be drawdown over future years.

The advantage of this method is that interest is only charged on the money withdrawn; not on the remaining funds in reserve. Interest is only charged on this as & when additional funds are taken.

This reserve facility is therefore the solution to providing the income required. The funds can be withdrawn as ad hoc payments in minimum amounts of between £2000-£5000 depending on the equity release lender.

Therefore, depending on the annual income required, this amount can be withdrawn from the equity release drawdown facility meeting the income objective.

 

 

Considerations while opting for equity release scheme

While planning to opt for an equity release loan, there are few important things you need to consider. The lender, via the legal process will first check that all your mortgage & secured loan balances are completely repaid. They will also check whether you are the owner of the property by checking the land registry records.

Moreover, a valuation of your property will also be conducted by an independent local surveyor. Your age is also a determining factor on how much equity you can obtain.

 

If you want to live a stress free life after retirement, choosing an equity release scheme can be  an excellent solution.

 

Contact Mark on 0800 678 5159 to discuss your income options further or visit Equity Release Supermarket

 

Equity Release Schemes – The Main Types of Lifetime Mortgages

Wednesday, July 28th, 2010

Would you like to have a secure and enjoyable retirement?

 

If your answer is yes, then an increasingly effective option for the over 55’s is using equity release schemes.

We all have different financial needs & the more recently developed equity release schemes are designed to meet these requirements. These schemes are incorporated within the lifetime mortgage schemes and reversion plan product range.

From this selection the roll-up lifetime mortgage scheme is preferred by the majority of people.

A lifetime mortgage scheme is specially designed for homeowners who are entering retirement and want to release equity from their home as a secured loan. Under this equity release scheme, the repayment takes place on death or the client moving into long term care.

Once you have opted for this scheme, you can continue living in the same residence for the rest of your life, even if the equity release balance become more than the value of the house. This is due to the inclusion, at no extra cost, of the no negative equity guarantee. This ensures that no debt, over & above the property value can be passed onto the beneficiaries.

Reassurance is therefore given to the children that they cannot incur debt by the actions of their parents.

This rule is a condition of all lenders that are members of the equity release trade body – SHIP (Safe Home Income Plans) who provide consumer protection in the equity release marketplace.

 

In Summary

A lifetime mortgage scheme can divided into the following types.

  • Roll-up lifetime mortgage
  • Fixed payment lifetime mortgage
  • Interest-only lifetime mortgage

 

Roll-up lifetime mortgage – Under this kind of scheme, you do not have to pay any interest or repayments for rest of your life. The interests will be compunded yearly onto your actual loan amount and it will be paid when the home is sold on death or moving into long term care.

 

Fixed repayment lifetime mortgage – In this scheme, there is no interest added to the actual amount but you have to payback a fixed amount when your home is sold. The scheme remains the same even if you sell your home after six months or 25 years, hence it is always important you receive independent equity release advice. This equity release is currently offered by Just Retirement.

The maximum charge that can be secured is 75% of the property value. The value of the overall facility is determined by several factors including your ge, sex, property value & your health & lifestyle situation. Click here to request further details on this unique equity release scheme.

 

Interest-only lifetime mortgage – People who do not want the build up & compounding of interest can choose to make monthly repayments of interest only. Using this method, no interest is added onto your main loan as any interest generated is repaid back on a monthly basis.

Before choosing a type of lifetime mortgage, you must consider your post-retirement income and what your needs will be.

 

To discuss any of the above issues please contact Mark Gregory on 0800 678 5159 or visit the Equity Release Supermarket website.

 

Get Tax-Free Money Against Your Home Using An Equity Release Scheme

Sunday, July 25th, 2010

Equity release schemes are especially designed for older homeowners. These schemes offer a lump sum amount of money or a regular income against the value of your home. One of the best things about these schemes is that they allow you to live in your home for the rest of your life.

Another important feature about equity release schemes is that they offer a tax-free amount of money by unlocking the equity in your home. This means that you can spend the cash in any way you want without an income tax liability.

 

 

How much money you can release against your home?

The lump sum amount of money varies from a minimum release of £10,000. The maximum release is determined by two factors: –

  • Age of the youngest homeowner
  • Valuation & type of property

If you want to know how much can you release as you can see the important factors are your age, house value and outstanding debt. Nowadays, most people use an online equity release calculator to know the amount they can release.

Click here to calculate your maximum release.

 

 

Nevertheless, it is not always advisable to apply & release the maximum equity release possible.

In every equity release case, advice must be provided by a qualified equity release adviser such as Equity Release Supermarket. The reason for this is that equity release schemes are regulated by the Financial Services Authority & most lenders who offer such schemes are also members of SHIP (Safe Home Income Plans). These levels of protection are essential in guaranteeing quality advice to people over 55 years of age.

 

Equity Release Supermarket advisers would only recommend you take an initial amount that would be required initially for the first 12 months from application. This is to reduce the impact of the roll-up effect of the equity release scheme over the longer term. By taking the maximum release from outset & having no plans for its expenditure would only leave the excess funds languishing in a savings account. With today’s interest rates this would not be financially savvy as the rate on the equity release scheme would be 3%+ higher than that of the savings account!

A more cost effective way of releasing equity in these circumstances would be by a drawdown equity release scheme. Here a cash reserve facility is provided by the lender. From this, you can take an initial release depending on your first 12 months expenditures. The remaining reserve funds can then be withdrawn as & when demand is required.

By taking this equity release route would mean that less interest is paid as you are drawing down a smaller amount & then ad hoc smaller payments over the years.

This is much better financially for beneficiaries also as there is also potentially a lower balance thus resulting in a greater inheritance for them in the future.

 

 

If you have decided to opt for an equity release scheme, you must consult an advisor who will help you fill in the documents. There are some factors which need to be considered before releasing the cash against the property.

These include:

  • The homeowner must be over 55 years of age
  • There should be little or no outstanding mortgage
  • The property should be worth at least £70,000

Subject to this criteria being met then the next stages of the application process can be achieved & your equity release adviser will explain the forthcoming stages to complete the whole process.

 

 

If you need assistance with equity release calculations, please contact Mark on 0800 678 5159 or visit the Equity Release Supermarket website by clicking here

 

Equity Release – Retiring Without Worrying About The Future

Wednesday, July 21st, 2010

Halifax equity release is a good option for retired individuals who want to live a tension-free lifestyle after retirement. Unlike traditional mortgage plans, Halifax equity release is specially designed for individuals who are looking for home safety along with a better lending choice. This mortgage option can be used to raise equity from your property if you are over age 55 & are now in receipt of retirement income.

 

The money raised through the Halifax equity release mortgage can be spent the way you want. So, irrespective of whether you want to go on a holiday, exotic cruise or make home improvements, opting for equity release can be great at meeting your financial needs.

 

With inflation constantly on the rise & budgetary constraints we are all facing currently, retired individuals also are facing a lot of problems coping with their finances. However, there are certain requirements one needs to fulfil in order to qualify for Halifax equity release schemes. For instance, applicants must be above 55, retired and possess property of their own. The amount of equity one can release through this scheme depends on the age,  pension income & the market valuation of their property.

 

So, if you are planning to go for Halifax equity release, it is always better to ensure that your property is well-maintained. Additionally, if you have a current mortgage on your property this will need to be repaid on competion of your new Halifax retirement mortgage. This will be paid for from the proceeds of the Halifax application & will be redeemed by the solicitor acting on your behalf. Therefore, whenever the interest only mortgage calculations are made the existing mortgage figure should always be taken into account.
The good news however, is that if you do have a current mortgage, no matter the size, & remortgaging to the Halifax Retirement Home Plan then there are some excellent deals available. As of July 2011, Halifax remortgages will provide a FREE valuation, FREE standard legal fees & on some products we can even obtain NO application fee.
As there are different Halifax equity schemes available today, you must carefully research your options. This way, you can go for one which suits your needs & receive advice from an independent equity release adviser who can provide you with best advice from the whole of the market.

If you wish to discuss the current Halifax Retirement Home Plan deals via Equity Release Supermarket contact the team on freephone 0800 678 5159 or email mark@equityreleasesupermarket.co.uk

 

Home & Capital Increase Lending on Home Reversion Plans

Friday, July 2nd, 2010

Good news is back in the equity release market as Home Reversion Plan provider Home & Capital  increase on two fronts the amounts they will lend on their products.

 

Recently there has been a reduction in the number of equity release schemes available in the market which has resulted in fewer options for those in need of cash for their retirement plans.

Therefore news that Home & Capital are reversing this trend with its home reversion plans is excellent news.

 

The latest calculations now show that for a male aged 70 the home reversion rate has now increased from 43.25% to 47%. That’s a healthy increase on the amount Home & Capital will lend & represents a good increase on the equity release scheme funds clients will receive.

 

Secondly, all Home & Capital reversion plans have had an increased the ceiling on the maximum amount customers can raise.

This has now risen by over 41% from its previous maximum of £85,000 upto £120,000.

The maximum percentage of the property you can sell with Home & Capital home reversion plans is 95%.

Existing offers on the Home & Capital reversion plans will continue. This includes no arrangement fees & a special offer of a free valuation on all applications made before 31st July 2010.

The minimum age for the home reversion plans  is 65+.

 
These increases come at a time when retired people who wish to consider equity release are being hit on most sides.

Lower interest rates on their savings coupled with the impending increase in VAT will all affect the elderly population greatly over the next 12 months & beyond.

Therefore, there is some light at the end of the tunnel for the elderly who need financial assistance & a supplement to their capital or to boost income.

 

With property values showing a steady, yet unspectacular increase since the start of 2010 many people in retirement can be sitting on a large amount of equity that can be utilised.

People are increasingly beginning to embrace the idea that their property is a legitimate asset that can be used to release equity – either via downsizing or via equity release schemes.

 

To discuss your equity release requirements further please contact Equity Release Supermarket on 0800 678 5159 or email – mark@equityreleasesupermarket.co.uk

 

 
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