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Lifetime Mortgage Calculators: How they are used to Calculate Maximum Equity Release Lump Sums

December 8th, 2011

The current global financial crisis has affected everyone in many ways. For those who have retired or were planning to retire, the credit crunch and related crash in the markets have wiped £billions from pension funds. For many, savings and pensions that were once thought to provide a strong foundation for retirement have been compromised, and these people will need to supplement their pensions with other financial products.

A great option for these people is to look into equity release schemes. A great place to start researching how best to conduct the release of equity from their property is to start with equity release calculators; also known as lifetime mortgage calculators. These online tools are very helpful for providing basic information to start a discussion over the potential options available for those looking for equity release schemes and products.

The equity release calculator, or lifetime mortgage calculator, is the first stop for many researching equity release schemes. The great thing about these easy-to-use online tools is that they provide an idea of what is possible. This popular online equity release calculator does just that.

The equity release calculator asks for the age of the youngest homeowner. This is important, as equity release schemes are only available to those over the age of 55, and age bears an important part of the value of equity release. The value of the property is also required, for obvious reason as equity release schemes are generally based on the principles of the interest only home mortgage.

If there is any other mortgage or loan that uses the property asset as collateral, the outstanding value of these should be included as well, as they affect the overall value of what is available in an equity release scheme. Therefore any existing security on the property such as a mortgage or secured MUST be paid off prior to completion. This is usually resolved by using monies from the equity release itself, as the process can be completed by a simultaneous transaction at the solicitors.

The first option presented through this equity release calculator is for the most common and standard plan. This is based on a person in good health, starting from age 55. For those who have suffered from ill health may be entitled to an enhanced lifetime mortgage programme. The total potential maximum amounts for each health option is listed for each. The equity release calculator provides a clear understanding of what the boundaries of the financial package will look like. Then it is a matter of discussing what the options for finance are within that value. The calculators will provide a maximum release of equity figure. Bear in mind this should not always be an indication of how much should be taken. Best advice would be to plump for the optimum amount based on your requirements instead.

Alternative options than roll-up equity release schemes could include an interest only home mortgage, or a more specialist Stonehaven interest only mortgage scheme. The equity release calculator is linked to an accredited financial institution, so it is possible to start discussing that figure right away with a financial expert. However, for those looking to shop around, the figures will be helpful in their research.

The calculator noted above is a lifetime mortgage calculator, and is tailored toward those specific kinds of equity release schemes.

Home Reversion Plans have different criteria which include more details about the gender of the applicant and his or her state of health. Both have an important impact on this kind of equity release product value.

The current global financial crisis has been hard on pensions, and many who thought they had enough money stored in savings and pensions are now looking for alternative financial supplements for their retirement. Equity release is one such supplement, and equity release schemes can really help those looking for a release of equity from their property investments, without having to sell.

This allows the property assets to remain in the inheritance chain, but still provides a way of recovering some of the value in the asset for today’s needs – in the form of an interest only mortgage or other financial solution. A great way to start on the search for the right equity release product is through the use of equity release calculators which show the monetary options available.

To discuss your retirement mortgage queries, please contact the Mark on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk

Tags: equity release, Equity release calculator, equity release calculators, equity release schemes, interest only mortgage, Stonehaven
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Do Stonehaven Offer A Real Interest Only Lifetime Mortgage Solution Following the Demise of the Halifax Retirement Home Plan?

November 15th, 2011

Since its withdrawal in August 2011, the Halifax Retirement Home Plan has certainly left a void in the post retirement mortgage market. What options remain for pensioner mortgages?

Pensioners, who were proposing to use the Halifax Retirement Home Plan at a future date, unaware of its impending withdrawal, have now had their retirement plans severely disrupted.

Enquiries are still being received from retirees looking for a pensioner mortgage which can be used for a variety of lifestyle solutions.

With options from moving house, to holidays, gifting to children & home improvements, there has been a significant reduction in the interest only mortgage options available.

So why was the Halifax Retirement Home Plan Withdrawn?

Enormous demand for the Halifax Retirement Home Plan apparently consigned the product to its own demise. Success is not usually associated with dramatic failure, but it seems the Halifax Retirement Home Plan was in this case, a victim of its own success.

Given the volume of applications Halifax was receiving, even a lender the size of Halifax was struggling with such popularity. Towards its latter days the Halifax back office systems were choking, solicitors being incorrectly instructed & timescales reaching unacceptable levels, so much so that Halifax have actually compensated clients due to administrative errors.

Reasons for the Halifax Retirement Home Plan’s Popularity

Since the products inception in July 1984, the Retirement Home Plan lay hidden in Halifax’s mortgage book for many years.

However, certain intermediaries specialising in equity release, subsequently understood the product had a role to play in providing best advice & offered an alternative to roll-up equity release schemes.

Not everyone is suited to a lifetime equity release scheme where the interest rolls up & compounds annually for the rest of their lives. Roll-up schemes to some pensioners can prove off extremely off-putting, with the balance approximately doubling every 10-11 years. The resultant effect & the impact of the compounding of interest will be that their beneficiaries will receive a significantly lower or completely eroded inheritance.

Therefore, for retirees who did not want this scenario, the interest only lifetime mortgage proved an excellent alternative. Obviously supported by a good secure disposable income, the Halifax monthly mortgage payments could be fulfilled, with the resultant effect of keeping the mortgage balance exactly the same for the remainder of the mortgage term.

However, the doomsday scenario did eventually arrive & the Halifax Retirement Home Plan was pulled on 17^th August 2011 at very short notice.

Regulation & the FSA Effect

With the FSA (Financial Services Authority) now imposing stricter regulation on interest only mortgages, this has impacted on the whole post retirement mortgage market.

Regulation here should be reviewed & consideration given to the plight of pensioners.

Over 60’s looking for finance have fixed income for life.

They are already drawing their state, private & occupational pensions.

They are therefore in receipt of a guaranteed income for life.

They can’t be made redundant, be off work due to sickness or take maternity leave!

Additionally & historically the retired generation of today have a different attitude to credit & tend to err on the side of caution. They have benefitted from house price booms of the last decades & consequently on the whole have a great deal of equityto release in their properties.

From a lenders perspective you can’t get much better security than this?

So why are the over 60’s being penalised?

After discussions with various lenders their defence has supposedly been the fragility of repayment. Considering monthly mortgage payments are paid by direct debit & pensions & retirement incomes are paid directly into the bank account, this doesn’t seem to hold true?

The distinction should be therefore be made between the people pre retirement & those post retirement with regards to interest only mortgages.

The FSA has understandably clamped down on first time buyers & mid life mortgagors taking out interest only mortgages with NO repayment vehicles. However, this has been to the detriment of pensioners whose cause has been undermined.

So for now we have to accept the level of caution in the mortgage market. However, moving forward consultation & consideration should be given to this corner of the mortgage market as it can have additional benefits to a fragile economy. The reason being is that pensioners releasing equity in retirement do so mainly for lifestyle reasons:-

home improvements
deposits for the children
holidays
new car/caravan

All these expenditures for one reason or another will help boost both the local & national economy.

What Interest Only Pensioner Mortgages Are Currently Available?

The aforementioned issues have arisen with the tightening of interest only criteria. Lenders will now insist on most mortgages expiring by age 75 & this will usually have to be on capital & repayment basis. More often than not this will result in the monthly cost being prohibitive, as paying off a mortgage of £50,000 over a short term of say 10 years can be out of most people’s affordability levels!

Nevertheless, a specialist equity release lender has analysed the situation better than most & hence we unveil the Stonehaven Interest Select Plan.

Offering SHIP security & choice as to the size of the monthly contribution, Stonehaven have covered all bases. This interest only lifetime mortgage provides lifetime fixed interest rates starting from just 6.13% thereby offering affordability now & into the future. With pension incomes rising over the years, but the monthly mortgage payments guaranteed to remain the same, the Stonehaven interest only equity release plan provides protection from future increases in interest rates.

However, it doesn’t end there because if financial difficulties do arise then there is always the option to switch it over to a roll-up equity release plan with Stonehaven. No further payments are then required & dependent upon whether the switch was planned ahead or not, will determine whether an extra 0.2% is added to the rate.

Stonehaven are members of SHIP & regulated by the FSA.

Rumour has it that niche lenders are now starting to look into pensioner mortgages & eyeing business opportunities, so there does seem to be light at the end of the retirement rainbow!

If you wish to make an enquiry on the Stonehaven Interest Select call the Equity Release Supermarket team on Freephone 0800 678 5159 or email mark@equityreleasesupermarket.co.uk

Tags: equity release, interest only lifetime mortgage, interest only mortgage, lifetime mortgages, SHIP
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Equity Release Supermarket Announces New Exclusive Cashback & Low Interest Rate Deal with Just Retirement

November 12th, 2011

Following hot on the heels of Equity Release Supermarket’s recently advertised Aviva cashback/valuation/interest rate deal, Director Mark Gregory is pleased to report a further exclusive equity release offer from Just Retirement.

‘We are pleased to advise that we now can provide a much improved offering to our customers from Just Retirement. On the back of a successful year in the equity release market, our achievements have now been recognised & rewarded by Just Retirement.’

Similar in nature to the Aviva deal, Just Retirement are to offer Equity Release Supermarket customers an amazing £700 cashback, FREE unlimited valuation & specially reduced interest rate of 6.35%.

The £700 cashback coupled with free unlimited valuation will enable our customers to submit an equity release application with NO upfront fees.

Major beneficiaries of the free valuation will be the applicants with higher property values, who will benefit from a completely FREE valuation. An example of this can be seen on a property valuation of £500,000 which will save such Equity Release Supermarket customers a sizeable further£500!’

The combination of free valuation & cashback (which offsets the application fee) results in the only fixed set up cost to be the equity release legal fees. These can be offered to Equity Release Supermarket customers for as low as £349+VAT & disbursements.

Just Retirement are one of the leading equity release companies whose drawdown scheme has recently undergone a major review, the results of which are now becoming evident.

The Just Retirement drawdown facility, which used to be capped at 100% of the initial release, has now been revised for the first time since its inception over 5 years ago.

The review has resulted in Just Retirement’s drawdown facility being increased from 100% to 200% of the initial withdrawal. This now puts it in line with fellow equity release lenders such as LV= which uses the same formula for calculation of the size of the additional reserve facility.

To request a quote on the special offer from Just Retirement please click here.

To find your local Equity Release Supermarket adviser please click here or call freephone 0800 678 5159.

Tags: cashback deal, drawdown equity release, equity release, Equity Release Adviser, Equity release interest rates, equity release schemes, Equity Release Supermarket, exclusive interest rate, free valuation, Just Retirement special offer
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Equity Release Supermarket – New Exclusive Cashback & Low Interest Rate Deal from Aviva

November 11th, 2011

Equity Release Supermarket is pleased to announce its new equity release deal from Aviva.

Commenting on the exciting new deal from Aviva equity release which offers clients a FREE valuation* plus a £500 cashback & specially reduced interest rate of 6.32%, director Mark Gregory states…

‘the offer from Aviva is testament to the work & progress Equity Release Supermarket is making in the equity release market. Buoyed by the growing consumer confidence in equity release schemes, I feel that we are now positioned to increase our market share. Excellent deals from the likes of major equity release companies such as Aviva will help my team of advisers promote such competitive equity release plans.

Equity Release Supermarket are now recognised as one of the major independent equity release brokers in the UK. Their market leading website offers all the current equity release interest rates & exclusive offers currently available.

Experience the Equity Release Supermarket website or to speak to one of their experienced equity release advisers call freephone 0800 678 5159.

*Free valuation applies to property valuations upto £250,000

Tags: Aviva, Aviva cashback deal, Aviva equity release, Aviva free valuation, equity release, Equity release interest rates, equity release schemes, Equity Release Supermarket
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Interesting equity release plans for you to consider

October 19th, 2011

The ever increasing price rises are a concern for everyone. Inflation today has been quoted at 5.4% & therefore pressure is being exerted on mortgage & equity release interest rates. People who have retired and have a limited pension are in a worse situation than in the past. Their pension does not allow them to fulfil even their basic needs, let alone luxuries. In this hard and fast world, pensioners often feel secluded and uncared for.

However, all is not doom & gloom for those with properties & equity tied up within them. Mortgages haven’t tended to be the focus for the retired. Their credit history tends to err on caution rather than frivolous in nature. Yet credit trends are changing with the acceptance of new credit lines & leniency towards the children’s inheritance. So more emphasis is being placed on the release of equity from lifetime mortgage schemes.

If you have not heard about equity release, then we will help you to understand all about it. Equity release schemes allow you to generate extra money over and above your pension. If you are one whose money is in limited supply, equity release schemes could be the answer for you. If you own property, you can apply for any type of equity release scheme. Your property enables you to release tax free cash which can be taken in stage payments or as a one off lump sum. This additional cash helps you to live your life properly and with all the luxuries you have become used to. More common reasons for equity release UK plans are home improvements, new car, holidays, gifting to the children or to help with the purchase of a new property.

There are many plans you can apply for, but drawdown equity release schemes are now the most popular. These roll-up equity release schemes offer an overall cash facility from which you can take money from as & when required. By opting for this formula you will only pay interest on cash actually taken & not the funds still held by the equity release company in their reserves.

Increasing popular are the interest only lifetime mortgage plans provided by companies such as Stonehaven equity release. Helped by the previous popularity of the Halifax Retirement Home Plan, interest only lifetime mortgages have increased awareness of interest paying mortgages in retirement.

Equity release has been in existence for a long time now, but still not everyone knows about it. The equity release trade body SHIP (Safe Home Income Plans) has led a sole crusade in raising awareness by pushing for consumer protection. Thanks to SHIP, today’s equity release schemes can be trusted & applied for without concern.

If you need advice on whether equity release or interest only lifetime mortgages are for you then please contact Equity Release Supermarket on 0800 678 5159 or visit the EquityReleaseSupermarket website.

Tags: equity release, Equity release interest rates, equity release schemes, Equity Release Supermarket, Halifax Retirement Home Plan, release of equity
Posted in Equity Release, Interest Only Lifetime Mortgage | No Comments »

Need to learn more about equity release schemes?

October 18th, 2011

An increase in the standard of living & more recently inflation levels has caused a shortfall in pension provision. This is now affecting all those people who are on the verge of, or now in retirement. So for those retirees who are on fixed incomes, how can they allay their fears of personal budget shortfalls?

Well consider equity release schemes as an effective solution to this problem. If you are looking for some more information, this guide will help you understand the lifetime mortgage schemes available.

What is an equity release scheme?

Equity release schemes allow you to release equity tied up within your home. These schemes are very popular amongst individuals who are entering, or now into the retirement phase of life. Thus, retirees can therefore overcome any shortfall in their income by utilising the tied up tax free cash within the value of their home. Equity release schemes provide pensioners with a steady flow of income thereby helping them to maintain and improve their quality of life. Additionally, in recognition of the demand for irregular tax free cash, drawdown equity release schemes can now provide flexibility.

Equity release is used to cover financial products that release home equity. However, they need not require any monthly payments & therefore do not affect retirement budget. It is very important to keep in mind that equity release schemes can only be considered for people who are above 55 years of age. For home reversion schemes this minimum age is increased to age 65 in lieu of the manner these schemes operate.

Lifetime mortgage plans are becoming increasingly popular amongst retired individuals. They provide a lump sum amount based on a combination of the age of the youngest homeowner & the property value.

The younger this age is, the lower the loan-to-value.

In contrast for those more elderly can release a percentage of the property upto 54%.

A few other benefits of SHIP (Safe Home Income Plans) equity release schemes are:

Improved standard of living
Portable mortgage to another property
A fixed rate of interest for life
No monthly payment or instalments required
No negative equity guarantee

Equity release is an ideal option when it comes to securing your future. If you find the process confusing, it is highly important to consult an equity release advisor such as Equity Release Supermarket. With access to market leading deals & special interest rates they can research the whole of the equity release market to find the best equity release deal available.

If you require advice on which equity release is suitable for you, contact the Equity Release Supermarket team on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk

Tags: drawdown equity release, equity release, Equity Release Adviser, equity release schemes, Equity Release Supermarket, home reversion schemes, No negative equity guarantee, Roll up lifetime mortgage, SHIP
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