Archive for January, 2012
Monday, January 30th, 2012
If you have been seriously considering taking out an equity release plan, the most important question to come to mind will be ‘what is the maximum equity release available?’
Obviously, you may not want to secure everything you can get, however, a useful equity release calculator can advise upto the maximum available. For instance with a drawdown equity release plan, it would be helpful if you knew the maximum, as any funds not taken in such a scheme would then be held in a reserve facility for future use.
You will also need to bear in mind that there are certain factors that will be taken into account in order to arrive at the figure that would be released to you in such a plan.
First and foremost, your age will be a very important factor. The younger you are, the less you can expect to have released in an equity release scheme. You would tend to find that the companies that deal in equity release plans add an extra percentage point of LTV (loan-to-value) for each year the applicant gets older.
This is because the relevant company has to estimate how long it is likely to be until they will be able to secure the final equity – i.e. your property. If you take out an equity release mortgage when you are in your late-fifties or early-sixties, you can expect to receive a far lower payout than if you were to have taken out the plan in your eighties, for example. This is purely down to life expectancies which are increasing all the time as people are healthier & more active in their retirement years.
You should also bear in mind, at this stage that the companies dealing in equity release schemes have a minimum age threshold in place and this is generally set at 55 years of age. These would be companies such as Aviva, New Life Mortgages, and Stonehaven. However, some equity release companies such as Just Retirement & LV= impose a higher minimum age of 60 before you can apply.
The next factor that will be taken into account is the actual market value of your property. Again, the higher this is, the more you can expect to receive in your payout. There are minimum value thresholds in place here as well which is £60,000. However, most companies impose higher minimum values & £75,000 or £100,000 isn’t uncommon.
If you are looking to take out an equity release plan in a joint application, the youngest applicant’s age will be the deciding factor as to the amount of money that will be released in the payout. This is because the company must wait for both applicants to either pass away or move into permanent residential care and the youngest applicant will be the most likely to vacate the property last in either capacity. Also, as stated earlier, the youngest person in the couple must also be over the age of 55.
There are convenient equity release calculators on many websites that will give you a very good idea of the amount of money to be expected as a payout when you take out such a plan. All you need do is simply complete an online enquiry form and these will return the maximum value that may be available to you in an equity release scheme. If you are happy with this figure, you may then go ahead and start the ball rolling with the relevant company; there is also a facility to discuss equity release mortgages in more detail with a qualified equity release adviser, if you have further questions that require attention.
Monday, January 30th, 2012
Following on from the post on Friday regarding Aviva reducing its equity release interest rate on their Lifestyle Flexi plan (drawdown scheme), another lender has now followed suit.
LV= (Liverpool Victoria) today advised that it is also to drop its rates with effect from 1st February 2012 on both its Lifetime Mortgage – lump sum plan & the Flexible Lifetime Mortgage – drawdown scheme.
The corresponding rates are as follows: –
Lifetime Mortgage – lump sum – 6.39% (6.60% APR)
Flexible Lifetime Mortgage – 6.49% (6.8% APR)
Although interest rates are higher than the two largest providers – Aviva & Just Retirement, LV= do have some quality features that make it stand out from the crowd.
Firstly, their early repayment charges are fixed. This means that there is no link to gilt rates as the basis for the early repayment charge calculation, like Aviva & Just Retirement do.
LV=’s early repayment charges are known from the outset & are 5% in the first 5 years & 3% in the next 5 years. For some this can be reassuring news should their circumstances change in the future & early repayment is necessary.
LV= also allow partial repayments, subject to a minimum of £5,000 so if you are looking to work around potential early repayment this can be planned accordingly.
Equity Release Supermarket currently receive a free valuation with LV= with no current deadline. So now is as good a time as any to be considering an equity release application with the recent interest rate reductions across the board.
If you wish to obtain a quotation or advice on any of the LV= equity release schemes, please call our freephone 0800 678 5159 or email email@example.com
Friday, January 27th, 2012
With the latest round of equity release rate reductions, it seems both Aviva & Just Retirement are vying for top spot.
Currently, Just Retirement lead the way with their round of reductions a few weeks ago at a market leading 6.2% annual rate.
However, Equity Release Supermarket have been notified that with effect from next week the Aviva flexi drawdown plan is set to become the market leader again by usurping Just Retirement with a reduction of 0.12% to a new market leading rate of just 6.1% annual rate.
Mark Gregory – Director & founder of Equity Release Supermarket comments – “This is excellent news & the price war has been long awaited. Equity release interest rates have been in the doldrums recently compared to mainstream interest rates. We are getting back to rates from a few years ago & that sub 6% barrier is now not too far away. This new Aviva rate is exclusive with further benefits of a free valuation & an excellent £500 cashback on completion for the client. With gilts rates so low at present, now is as good time as any to be considering taking out an Aviva Equity Release plan.”
Equity Release Supermarket are one of the leading independent equity release advisory firms in the UK currently & can be found on their informative website http://www.equityreleasesupermarket.co.uk
If you require information on the new Aviva Flexi deal please call 0800 678 5159 where one of the equity release team would be willing to assist & provide further details.
Sunday, January 15th, 2012
The current financial climate is quite simply awful for many people. Particularly, the retired & elderly are really struggling to make ends meet. Many retired people who left their work before the crisis hit have had to watch in horror as a lot of the value they had expected to retire on has been wiped away by stockmarkets & low interest rates with the banks & building societies. Sometimes, what is left in the pension isn’t enough, and their reaction is that they should sell their house in order to ensure a comfortable retirement.
However, with equity release plans, this might not necessarily be required. Instead of selling the family home, why not release equity to cover the short term finances. We maybe only talking a small sum to tie you over until prospects improve. Therefore, for the sake of selling in a depressed property market, bide your time & think carefully about your options available. Equity release schemes can play an important role here.
Equity release schemes are form of mortgage that enables people over age 55 to release locked up equity in their main residence. The typical and most commonly thought of equity release schemes are actually called lifetime mortgages. Lifetime mortgages are available to those over 55, and have specific characteristics which reflect this unique stage in life.
Equity release schemes are like normal mortgages in that they are associated money & a property. However, where most mortgages are used to purchase the property over an extended period of time, equity release mortgages are new mortgages placed on properties which already have or virtually paid off the mortgage. The result is that while the property now has some debt associated with it, the value that is unlocked can be used for large scale projects or purchases, supplement pensions or more commonly home improvements.
The other difference between an equity release lifetime mortgage and a normal mortgage is that with an equity release mortgage the assumption is that the balance will be paid off when the person who holds the plan sells the asset or as a part of the inheritance estate. This is why the over 55 age restriction on equity release schemes is so important. These financial products are designed to run for the rest of one’s life, so there is no call upon the repayment of the capital until death or moving into long term care.
Many retired people watched the drop in markets sweep billions from the values of the pension funds, and therefore pushing significant financial pressure inwardly. It is easy to see how the equity release mortgage would be an excellent option for retired people who are struggling either for income or a capital lump sum. Where they were potentially considering having to sell the family home or go back to work, many retired people can supplement their pensions with the value withdrawn via an equity release scheme.
As lifetime mortgage & home reversion plans are now members of SHIP, you always have the option of repaying the scheme during your lifetime. However, be wary of potential early repayment charges which some gilt related schemes can significantly impose. One way providers can recover their costs is through these means.
Often people think that equity release is tantamount to putting debts on to the next generation. What is important to keep in mind that with lifetime mortgages the ownership of the property stays in the hands of the plan owner, just like a regular mortgage. In fact, usually the biggest difference between a normal mortgage and an equity release mortgage is that the terms of the equity release plan are more favourable as they consider the age of the owner of the plan, and factor that into the calculations.
This means that those who inherit the property may also inherit the debt, but they now have the option to decide if they want to keep the property with a normal mortgage, or sell the asset and recover the rest of the equity. These are options which can be passed onward in an estate, making it easier for the family to make decisions which are appropriate for them.
Selling one’s house is an emotive issue & needs to be discussed with those closest to you. Next step would be to discuss whether equity release schemes are a viable option & this is where Equity Release Supermarket can use their considerable experience & knowledge to help.
For an impartial & free initial consultation call Mark on 0800 678 5159 who can offer words of advice. Alternatively,in confidence email mark@equityreleasesupermarket with any questions you may have.
Sunday, January 8th, 2012
Those researching equity release will find the use of an equity release calculator and lifetime mortgage calculator as really helpful basic starting points in conducting their research. These online tools are excellent for understanding what the potential maximum amounts of equity release that can be withdrawn. They also prove that research is paramount in establishing whether lifetime mortgages, home reversion or equity release schemes are the most suitable option.
The best equity release websites will provide multiple calculator options that answer the most common question – What is the maximum release available?
Always try & find an equity release website that offers a calculator for each type of equity release mortgage option. This is vitally important, as the equity release calculators on most sites only provide you with ONE answer. These sites are not painting the whole picture & may lead you to believe that equity release plans may not be able to help your situation. They maybe just trying to capture your contact information & are basically not providing the answers you require.
What is the Use of Knowing the Maximum Lump Sum?
The more comprehensive equity release calculators will advise the maximum lump sum. This is an important figure which can be used to understand what the total amount of equity release loan is available, based on the specific information included in the lifetime mortgage calculator. The reason of this importance is down to the fact that you may have a predetermined lump sum in mind & unless an equity release scheme can fulfil this shortfall, then your dreams can’t become reality.
Both equity release calculators & lifetime mortgage calculators require a certain amount of information regarding your current situation. More in depth calculators will go that one step further & can even tailor your answer, dependent upon health. The main two elements required for input are the value of the property & the age of the youngest applicant. This equity release calculator can then provide the total equity release maximum lump sum for both a standard & impaired life arrangement.
Different Types of Equity Release Calculators
These will be a lifetime mortgage calculator, home reversion calculator & an interest only mortgage calculator. Of these, the lifetime mortgage calculator should provide two answers – good health & poor health (enhanced).
For an enhanced maximum calculation i.e. where there has been a history of ill-health, then further information will be required to determine whether eligibility will exist. The enhanced equity release calculation will offer a higher lump sum than standard. The assumption by the lender is that due to the ill-health, the term of the equity release mortgage will be shortened. Therefore, as the interest roll-up period will less, then the lender can release more & thereby protecting itself from the no-negative equity guarantee.
When looking at this equity release maximum lump sum provided by equity release calculators such as the one above, it is important to note that there are a variety of options available to the customer, from that point. Within that maximum, a customer could find an interest only mortgage or one of the many other equity release products that are currently available on the market.
Equity release schemes often provide these calculators because they provide such important initial research for customers. People over 55 years of age who have invested in property may find that interest only mortgages and other equity release products are excellent for the release of equity from their homes without having to sell. This keeps the property in the family or inheritance chain, but also allows the ability to recover some of the money invested or grown in value over the years. There are a range of equity release products available, and it is best to discuss needs with an independent financial advisor. However, before doing so, it is useful to do some background research on what options are available and an equity release calculator, or a lifetime mortgage calculator, is a great place to start.
To access the Equity Release Supermarket calculator click here or call freephone 0800 678 5159.
Friday, January 6th, 2012
Products come, & products go; & we have seen the evidence of this by the unfortunate withdrawal from the mortgage market in August 2011 of the Halifax Retirement Home Plan.
The global financial crisis has been challenging for many, and retired people or those looking to retire have seen a large amount of value disappear from their pensions. This can be stressful and causes worry, but finance options are still available for those looking to supplement their retirement. Equity Release Supermarket has access to market leading interest only mortgages which are available only to people over the age of 55 & looking for ways to finance their retirement.
An example of such is the interest only lifetime mortgage is the Stonehaven Interest Select Plan. This is a unique and innovative option for many looking for additional financial relief in their retirement, but mindful of any inheritance that they wish to pass onto the heirs. Thus pensioner mortgages are now fully available to anyone over 55 & owning their own home.
The innovative Stonehaven Interest Select equity release scheme is unique among interest only mortgages as the total outstanding balance does not change. Instead of the interest rolling up like traditional equity release schemes, the interest on the Stonehaven Interest Select is paid monthly by direct debit. This is often done by the customer, but can be funded via the children or potential inheritors who are looking to keep the amount of debt on the property asset under control.
The great thing about the Stonehaven Interest Select equity release scheme is that the total amount of debt is managed for the duration of the interest only lifetime mortgage, making it a great financial product for those looking for interest only mortgages that don’t continue to eat into the ownership of the asset.
Due to this controlled nature, the Stonehaven Interest Select mortgages are fixed interest rate lifetime mortgages, the security of which many find appealing.
Stonehaven also provides a no negative equity guarantee, so even if the financial crisis worsens; there is no risk that a burden of debt will be passed on in the inheritance. These are two features which should be discussion points on any kind of interest only lifetime mortgages, as they provide important security and peace of mind.
Many people struggling to make ends meet during this financial crisis will be looking for ways to finance their retirement in a controlled fashion. Extra capital can really help to ensure that retirement is financially secure. At the same time, those looking for equity release schemes might be looking for control over how much value is traded for this additional security. Their research journey could start with the roll-up lifetime mortgage option, unaware that they are still eligible for an interest only mortgage even into retirement. Therefore, do not fall into the trap that some equity release brokerages will not advise this type of scheme is available. They may receive higher commission levels than payable by other companies, & this should not sway their advice.
Thats why approaching Equity Release Supermarket you will always receive comprehensive equity release advice; impartial & quality recommednations from experienced industry advisers.
They will discuss all your equity release options available, and endeavouring to find the right equity release solution for you. However, if your priority is to control the amount of equity that is being released from your main asset, then the Stonehaven Interest Select plan is THE innovative option to consider.
For further details on Stonehaven equity release plans please call Mark on freephone 0800 678 5159 or email firstname.lastname@example.org.