Posts Tagged ‘equity release schemes’
Friday, May 4th, 2012
There are many reasons why you should sit down & review your existing equity release mortgage. Like any financial undertaking, products do evolve and change, hopefully for the better over the years, & equity release schemes are no different.
Here we look at the reasons for reviewing an older equity release mortgage, understanding the benefits & how to go about ascertaining whether you can remortgage your existing equity release scheme, or possibly staying put with your current provider.
Reasons for considering an analysis of your existing equity release plan
Let’s first have a look at the factors for consideration in the transfer, switch or remortgage of your current plan: -
- Could it be because your existing scheme has now exhausted its maximum lending limits with your current equity release provider?
- Maybe you now require additional tax free cash due to change in circumstances or a financial emergency has arisen.
- Simply because you require a more competitive equity release deal than at present as you are concerned about the effect the roll-up & the compounding of interest that is affecting your equity release balance.
- Finally, there could be better equity release plans available in today’s marketplace that were not available many years ago and you wish to take advantage of this to save you children’s inheritance over the longer term.
What has changed since you took out your original plan?
Dependent upon when your original plan was taken out, many lenders are now offering better, more flexible and more secure plans. The main influence though will be the fact that interest rates have dropped so significantly. Having experience of advising on the older Norwich Union equity release plans, I have evidenced the fact that around 10 years ago their rates were in excess of 8%! How times have changed.
Not only that, but my team of equity release advisers have similar experience of the older schemes which is invaluable in the decision making process & analytics of whether to transfer your existing lifetime mortgage or not. Having worked for the likes of Norwich Union equity release, Prudential, NatWest, Key Retirement Solutions & Aviva, we have the experience & knowledge to conduct a full analysis of the equity release pros and cons relating to a potential remortgage situation
How low have equity release interest rates fallen?
The fact is, if you already have an equity release plan, now is as good a time as any to re-evaluate it and shop around. Although not as low as conventional mortgage rates, equity release interest rates have fallen recently, but mainly due to competition in the equity release market. With their aggressive stance presently Aviva have become the darlings of the lifetime mortgage market with their lowest interest rate of just 5.92%. But it doesn’t just stop there. With a free valuation thrown in & £500 cashback this represents the deal of the century!
When considering a remortgage, interest rate alone is not the factor that determines your decision. The costs involved in setting up the plan are essential & these should be minimised in order to make the transition ads costs effective as possible. Therefore, the current Aviva Flexi drawdown lifetime mortgage plan is possibly the one plan that would be a viable proposition to switch over to.
What other factors must be considered other than interest rate?
It is important to make sure that any new potential equity release scheme is flexible and can be modified whenever your circumstances change. Equity release schemes must meet immediate needs, but equally, it must also be able to adapt to the future. Many new equity release schemes are much more flexible than their previous counterparts. For instance, drawdown lifetime mortgage schemes are now the most popular form of equity release mortgage currently available. This is opposed to the mainly lump sum mortgages that were available in the past, which were inflexible, could only be reviewed every 5 years & you had to budget on this basis accordingly.
When reviewing clients existing equity release mortgages, I may find several better and more suitable products on the equity release market today. However, it is not simply a case of switching lenders. Many existing equity release schemes may have clauses that make it quite binding in the long term and may incur additional charges such as an early repayment charge. This factor could be the sole reason whether to switch equity release lenders or not and deter offsetting any savings made from switching to a new plan.
It is important to consider several factors while comparing the existing equity release plan to a new one. Current interest rates, the current value of the property and the amount that needs to be borrowed. A switchover can take up to 60 days, so it becomes important to take into account interest rates over 60 days, setting up costs and the current redemption figure to work out the amount that can actually be borrowed.
What action should I take now?…
To review your existing equity release mortgage, you will need to consult an independent equity release adviser who can provide impartial, unbiased and experienced advice on different options that are available. A careful and detailed comparison needs to be made, considering various costs that will be incurred during a switchover, including setting up costs, application fees, solicitors’ fees and advice fees.
From significantly lower interest rates, to more flexible terms, switching to a new plan may have several advantages for yourself…and your beneficiaries. As a company who is remortgaged many older equity release mortgages we can speak and practice from experience.
For a free equity release analysis of your existing lifetime mortgage, contact the Equity Release Supermarket team on 0800 678 5159 or complete the online contact form today.
Tags: Aviva, cashback, drawdown equity release, early repayment charges, equity release, Equity Release Adviser, Equity release interest rates, equity release remortgage, equity release schemes, Equity Release Supermarket, Financial adviser, free valuation, lifetime mortgage schemes, natwest equity release, Norwich Union equity release, Prudential, Prudential Equity Release
Posted in Advice, Equity Release, Topics | No Comments »
Sunday, April 22nd, 2012
Equity release schemes have now been in existence for over 15 years in their current format. Here we answer some common questions such as – ‘Can I get a better interest rate?’ & ‘Can I borrow additional funds?’.
Equity release schemes allow you to free up some or all of the equity tied up in your property and use the tax free cash for lifestyle reasons. This can be a particularly useful option for those who do not have enough cash flow and own a property, but do not wish to sell it.
If you already have an equity release scheme but for some reason you’re thinking, ‘should I remortgage my equity release?’ it may be worth your while to compare equity release rates & deals to find a more suitable product.
The equity release market is constantly changing, with interest rates rising and falling, and new innovative equity release schemes becoming available all the time. For instance, interest rates at the moment are much lower than they were just a few years back. So if you decide to remortgage your equity release just now, the fall in interest rates could result in significant savings for you over the long term, even when you take into account the setting up costs, which include solicitors fees, application fees etc. Not only that but you may have released all the money from your original plan & now find you require a ‘top-up’ to continue enjoying your retirement.
Why should I review my existing equity release plan?
With equity release schemes becoming increasingly popular, equity release providers are developing new products and schemes all the time. Something that was not an option a few years ago may now have become entirely possible. Therefore, a more suitable and pragmatic product may now be available. This means that by reviewing your existing equity release UK plan and shopping around for new options is a good idea, especially at this point in time.
What should I look out for?
Equity release schemes are defined as a lifetime mortgage. As such all plans have some form of in-build early repayment charge which is differentiated by the company offering the equity release plan. These penalties can exist for a set number of years on a fixed basis, or alternatively they can be linked to an investment such as government gilts or Bank of England base rate.
Particularly government gilts seem to be a favourable barometer used in today’s equity release marketplace. The two largest lifetime mortgage companies – AVIVA & Just Retirement have decided to use them, so you need to be aware of potential back end penalties if the equity release mortgage is paid off early. Other potential suitors such as LV= (Liverpool Victoria) & New Life Mortgages will only charge a fixed percentage penalty over either 5 or 10 years, with no penalty thereafter.
What is the next step?
If you are considering remortgaging your existing equity release scheme you must seek the professional services of an equity release adviser who has the experience of remortgage work. The adviser should be independent, so as to have the whole range of equity release schemes at their disposal. This is important as to remortgage again will incur a new round of equity release set up costs which need to be minimised as much as possible to ensure the new equity release deal is viable.
Before you decide to proceed with an equity release remortgage, it is important to consider several factors.
Remortgaging an existing equity release plan is not just a matter of switching to a new policy.
The following areas all need to be assessed & equity release comparisons made: -
- Current value of the property – this may have changed since the original valuation, particularly in light of recent market conditions
- Age of the youngest applicant – since the original equity release plan was taken out, you will be older, thus the loan-to-value ratio’s will have increased also meaning you can borrow a higher percentage of the house value
- Balance of the existing equity release scheme – this can be based on your last annual statement or by requesting a redemption statement from your lender
- Whether any early repayment charges would apply? – this can be ascertained from the redemption statement that should be ordered from your existing lifetime mortgage provider. This figure can be the difference between staying & switching plans dependent & the size & duration thereof.
Upon collating this data your equity release adviser can make an informed decision as to whether to stay put, or it’s in your best interests to switch plans. This is where the adviser’s independence becomes important. With any new equity release application comes a new set of set up costs. However, if your adviser can obtain a free valuation, cashback or any other incentive current available, then this will mitigate some of the new charges & make the whole process more worthwhile.
Professional financial advisers from Equity Release Supermarket will have all these tools at their disposal. With years of practical experience & many advisers having worked at the likes of AVIVA & Prudential, we know how these plans can be remortgaged & transacted quickly & cost effectively. With our current crop of best equity release deals we ever had, now is definitely a good time as any to consider saving yourselves, & your beneficiaries £1000’s by switching your existing equity release plan.
For a FREE no obligation equity release remortgage analysis, please contact the Equity Release Supermarket team on 0800 678 5159.
Alternatively, please complete the ‘find an adviser’ contact form to book an appointment with your local equity release adviser.
Equity Release Supermarket is one of the leading independent, over 55’s equity release specialists who have won awards for quality & impartial advice.
They can be contacted at mark@equityreleasesupermarket.co.uk where your enquiry will be treated with strictest confidence.
Tags: Aviva, cashback, early repayment charges, equity release, Equity Release Adviser, equity release awards, Equity release interest rates, equity release remortgage, equity release schemes, Equity Release Supermarket, Financial adviser, free valuation, Just Retirement, lifetime mortgage schemes, lifetime mortgages, LV=, New Life Mortgages, Prudential Equity Release
Posted in Equity Release, News | No Comments »
Friday, April 20th, 2012
News today in the equity release sector, is that Stonehaven’s range of equity release schemes are now available in mainland Scotland.
Stonehaven have been providing equity release mortgages in England and Wales since August 2006. However, due to strong demand for its range of interest only lifetime mortgages entitled ‘Interest Select’ plans, they have now incorporated the Scottish legal process into their equity release application. Therefore, with previous limited availability in Scotland for interest only lifetime mortgages, this should come as a great relief for many over 55′s in Scotland needing financial support for their retirement.
Why Has the Stonehaven Interest Select Plan Become So Popular?
Opinion is split whenever deciding to take a release of equity from a retiree’s property. Gone are the days when a one-off tax free lump sum was the only option. With the increasing flexibility in the market such as the drawdown lifetime mortgage & new enhanced equity release schemes, lenders are looking more towards ‘niche’ equity release plans.
Having captured the interest only mortgage market for the over 55′s, Stonehaven who were originally funded by Santander have come, gone, & are now back with there revised range of Interest Select Options & Lump Sum Plans. With healthy lending for 2012 & with the backing of a large mutual enhanced annuities provider, Stonehaven are now broadening their horizons & diversifying into Scotland.
People over the age of 55 are looking at different means of releasing equity from their property. Not only that, there are different financial attitudes towards their property & ultimate inheritance. This has increased awareness of the impact that roll-up equity release schemes have had on people’s inheritance on schemes previously taken out. Due to the compounding effect of the interest on roll-up schemes, many retirees have turned up their noses to conventional equity release mortgages.
This is where Stonehaven as an equity release company has benefitted. Possibly due somewhat to the demise of the Halifax Retirement Home Plan, Equity Release Supermarket advisers have seen a significant rise in enquiries for an interest only lifetime mortgage. There is a strong demand for an interest only mortgage for the over 55′s, and this signifies the fact that a majority of pensioners still have income to support a retirement mortgage. This age group has many advantages to prospective mortgage lenders, however for reasons discussed later in this article, they are significantly overlooked.
Why have Mortgages for Pensioners been Overlooked?
With a large proportion of equity in their properties, hence low loan-to-values, usually a good credit history & repayment record, the over 55′s are favourable for a mortgage where interest only repayment is only required. The Stonehaven range of Interest Select Plans have given this situation much thought, not only to the positive aspects, but also to the negatives in particular if someone encounters financial difficulties during the term of their plan. They have a specific ‘safety net’ in place that has the option that upon missing 3 monthly payments, or the planholder opts not to make anymore monthly payments, the plan can converted over to a roll-up lifetime mortgage. This removes any concern over incurring a poor credit record & eliminates any risk of repossession.
In addition the Protected Equity guarantee is available whcih can ensure that your beneficiaries receive a percentage of the final sale value of the property. Peace of mind for sure.
The Interest Only Mortgage Ticking ‘Timebomb’
Previous articles have discussed the FSA (Financial Services Authority) crackdown on mortgage lenders offering interest only deals. Correctly, this has made pre-retirement applications for interest only mortgages more stringent & more capital & repayment mortgages are now taken as a result.
However, this sweeping clampdown has also impacted on the post-retirement mortgage market. It seems the old adage ‘tarred with the same brush’ has been applied to the whole demographic mortgage population. It shouldn’t, as a different set of rules & principles apply to mortgages in retirement. Retirement mortgages should be made more available on an interest only or capital & repayment basis. There should be more understanding from the powers that be that the needs of pensioners are significantly different than those pre-retirement.
Retirees do not necessarily need, or want the eventual repayment of capital. Considering the FSA are regulating & accepting the principle of roll-up equity release schemes, then why the reluctance for interest only mortgages in retirement?
Exceptions should be made & this sector of the mortgage market be subject to a further review.
Nevertheless, one company who has received FSA & SHIP (Safe Home Income Plan) approval for its interest only retirement mortgage is Stonehaven. With foresight of circumstances to come & which were conceived over a decade ago, Stonehaven are currently, & will be, reeping the benefits.
Endowment shortfalls are now becoming more evident & with Aviva only expecting 1% of its low cost endowment plans to meet their targets in 2012, then we can see why mortgages into retirement are going to become a common occurrence. In addition for many reasons people are approaching retirement with a mortgage and no form of repayment. With lenders such as Santander, Woolwich, Halifax & Nationwide not extending terms for those reaching the end of their interest only mortgage terms, a solution for their plight needs to be found.
Stonehaven Solutions
Well, this is where Stonehaven see’s how their interest only lifetime mortgage can resolve such issues. Dependent on the size of the mortgage & property valuation, Stonehaven maybe be able to assist. By using the Stonehaven equity release calculator, one can ascertain the maximum amount they could lend & hopefully assist in remortgaging from the previous lender. This would be the ideal situation, but not always the best. Alternatives should be considered such as downsizing, using savings or getting assistance from family & friends, however this may not be in the best interests of the mortgagors & family ties may over rule such as decision.
If Stonehaven can raise sufficient equity on your property to repay the mortgage, it would mean transferring onto a lifetime mortgage product which then eliminates any concerns over repayment in the future. In fact repayment is only required upon 2nd death or moving into long term care. The only obligation during the term is to maintain interest only payments which will remain EXACTLY the same for life due to the lifetime fixed interest rate which currently start from 6.08% (6.40% typical APR).
Therefore, someone borrowing £25,000 on the Stonehaven Interest Select Lite plan would find their monthly payments at just £119.96pm fixed for life!
Next Steps
To discuss your interest only lifetime mortgage options & alternatives as to whether the Stonehaven equity release plans are suitable to meet your requirements, contact your local independent adviser at Equity Release Supermarket by calling freephone 0800 678 5159.
Additionally, visit the Equity Release Supermarket website & read the dedicated Stonehaven Interest Select page detailing the product features & current rates available. Here you can request a Stonehaven quote & gain a greater understanding of all Stonehaven’s schemes.
Tags: drawdown equity release, equity release, Equity Release Adviser, Equity release calculator, equity release schemes, Equity Release Supermarket, FSA, Halifax Retirement Home Plan, interest only lifetime mortgage, interest only mortgage, lifetime mortgage schemes, lifetime mortgages, Roll up lifetime mortgage, SHIP, Stonehaven, Stonehaven equity release, Stonehaven interest select
Posted in Advice, News, Stonehaven Interest Select | No Comments »
Saturday, April 7th, 2012
Home reversion schemes have literally had their nose pushed out of the equity release market upon entering the year 2012. There has been a significant rise in the popularity of lifetime mortgage plans; including drawdown equity release schemes, enhanced equity release schemes & interest only lifetime mortgages.
Figures produced by SHIP (Safe Home Income Plans) show that home reversion plans now only account for 2% of the whole equity release sales. Drawdown lifetime mortgages popularity has captured 62% of applications & conventional lump sum equity release sales amount to 36%.
It is clearly evident to see the sincere lack of home reversion applications. Here we look at the mis- conceptions surrounding home reversion schemes & why they must still be considered in the overall equity release scheme of things!
First let’s look at the home reversion plan basics.
The home reversion scheme requires the property owner to sell part or all of their property in return for a tax free lump sum. The lump sum offered by the reversion company will always be at a discount to the percentage sold. The reason for this is that the applicants can remain living in the property for the rest of their lives, rent free. Significantly, it could be some time before the home reversion lender receives their money.
No interest element is attached to home reversion schemes. Unlike lifetime mortgages, home reversion offers guarantees as to the percentage of the property that will pass to the beneficiaries at the end of the day. This stems from the initial decision made as to how much of the property’s title is transferred to the lender. For example, if 55% of the property is sold in exchange for a lump sum, then this will still guarantee 45% of the eventual sale proceeds will pass to the beneficiaries. This is a major advantage of home reversion schemes over lifetime mortgages & provides peace of mind.
So why the lethargy surrounding home reversion plans?
Perhaps one of the major stigmas attached is the fact that you will not own your property 100%. The reversion provider will co-own the property with you, thus having a greater say in its maintenance & future planning of the home. They will have the right to inspect the house at regular intervals to ensure it is maintained adequately, thus protecting their security. Any major home improvements will also need their permissions in case you were thinking of extensions or knocking down walls!
Another consideration would be upon moving home or wanting to sell. At this point an equity release calculation would need to be undertaken to establish how much equity you own based on current value upon transfer across to the new abode. Therefore independent valuations would need to be conducted to ascertain current market value. This could prove difficult in today’s market with a lack of sales & depressed housing market.
The one danger of home reversion plans is upon early death. Home reversion would prove expensive should you die or move into care in the earlier years of inception. Effectively, you have given up a large portion of your home based on average life expectancy. If you fail to reach this date, then home reversion could prove a poor decision. On the flip side, if longevity is in your family genes, then home reversion could be a great decision. Oh the virtues of a crystal ball!
Nevertheless, this aspect of the housing doldrums could actually have a positive accent as to why a home reversion plan could be more advantageous than a lifetime mortgage scheme. By taking out a home reversion scheme in anticipation that property values will remain static could prove beneficial. Afterall you are guaranteed that at the end of the day some equity will remain as you have a percentage of the property value guaranteed.
Compare this to lifetime mortgage schemes where the roll-up of interest compounds yearly & will continue escalating until the plan expires. In this situation, should property values remain static, then with a continuously rising mortgage balance & static house prices, will lead to the eventual erosion of the equity. This could be so much so, that NO equity remains at the end of the day with a lifetime mortgage.
So why should you consider a home reversion scheme?
As you can see the home reversion plan offers a sense of assurance which is not possible with many other equity release schemes. With the progress in medical science, the human body is capable of living much longer. Age therefore plays a major role in this equity release plan with a minimum starting age of 65. Indeed, the older one gets before taking out a home reversion scheme the better the terms that will be offered by the lender. The resultant effect of this is the older the homeowner, the more is paid as a capital lump sum.
Some of the negative issues surrounding home reversion schemes have been addressed by the providers – Bridgewater, New Life Mortgages & Hodge Lifetime. Particularly Bridgewater have considered many of these issues & allayed such fears by building in a series of plan options. Similar to drawdown lifetime mortgages, Bridgewater offer a flexible equity release plan which allows you to sell less than 100% of the home & still provide the guarantee of future withdrawals in the future.
Another home reversion plan flexible feature could be a ‘secured escalating release’ option which allows you to release a lump sum of cash now, together with a future income over a number of years. This is achieved with the use of annuities.
Finally, some home reversion plans could also offer protection on early death, so always make the necessary enquiries before entering into a long term financial commitment.
Home reversion redemption
The home reversion company will eventually receive their money by selling the property when the occupier has died or moved into long term care. Additionally, this type of home equity scheme offers the property owner the ability to change properties. This is a requirement of SHIP (Safe Home Income Plan).
Always take the assistance of an independent financial advisor so that they can help estimate the value of your property and help you decide on the scheme best suited to your requirements. Equity release is very beneficial for retired individuals who do not have a steady flow of income or require a capital lump sum for lifestyle improvements. One of the products that could succeed with these bequests could be the home reversion scheme as it offers stability, guarantees for your children and allows you to enjoy a worry free, rent free retirement.
For home reversion advice contact the specialists at Equity Release Supermarket on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk
Tags: Bridgewater, drawdown equity release, equity release, Equity Release Adviser, equity release schemes, Equity Release Supermarket, Hodge Lifetime, home reversion, home reversion plans, home reversion schemes, lifetime mortgages, New Life Mortgages, SHIP
Posted in Home Reversion | No Comments »
Monday, April 2nd, 2012
Following in the steps of the Stonehaven Interest Select plan, Hodge Lifetime are launching a new equity release plan with repayment options that include NO early repayment charges.
Previously, only Stonehaven equity release had created a niche in the lifetime mortgage market by offering an interest only lifetime mortgage. Stonehaven allow you the facility to repay the interest charged monthly, thus maintaining a level balance.
However, Hodge Lifetime has now created their own niche product, by offering a roll-up equity release plan with a spin. The unique feature of the plan is the facility of allowing partial repayments of upto 10% per annum with no penalty. This is a first in this previously inflexible early repayment charge equity release UK market.
The Mechanics
The option to repay without penalty applies after the plan has been running for at least 12 months. You then have the possibility of repaying all of the interest & an even an element of capital, if you wish. The minimum repayment is £500.
The major advantage of this lifetime mortgage is that no penalty would apply to this repayment as long as no more than 10% of the initial capital borrowed is repaid.
An example of this would be someone borrowing £25,000 initially. After, 12 months of the plan running they can then repay upto £2,500 each year thereafter. With a launch interest rate of just 6.31% annual equivalent, by paying the full 10% allowance would allow you to repay not only the interest but also the capital. The Hodge Lifetime Plan could then effectively be even used as a form of flexible lifetime repayment mortgage!
Background to Hodge Lifetime
Hodge Lifetime introduced the very first equity release plans in 1965 and have continued to earn a reputation for reliability ever since. Hodge Lifetime is a subsidiary of Julian Hodge Bank and is a founder member of SHIP (Safe Home Income Plans).
Plan Facts
The Hodge Lifetime Lump Sum Lifetime Mortgage allows you to take a single cash lump sum with a fixed interest rate for life. Plans start at age 60 & there is a minimum property value of £100,000 with a £20,000 minimum initial withdrawal limit. The plan is available in England, Wales & mainland Scotland.
Hodge Lifetime’s standard early repayment charges only apply for the first 5 years on a 5,4,3,2,1 basis. There is also an additional potential variable repayment charge dependent upon the movement in 25 year interest rate swap rates.
However, this variable penalty will be waived after 5 years. This ‘Downsizing Protection’ feature allows you to repay the Hodge Equity Release Plan with NO penalty if you move home after 5 years.
However, the main focus surely on the Hodge Lifetime Lump Sum equity release plan will be possibility of repayment the interest with a choice of when & how much.
No other equity release schemes provider will permit this at present with so much flexibility. Hodge will allow two payments per annum subject to the 10% maximum repayment & no penalty.
Who Would the Repayment Facility Benefit?
People who maybe wish to inhibit the traditional roll-up effect of their equity release plan would find the Hodge Lifetime plan of benefit.
- Those unable to commit to a fixed monthly repayment as their preferred choice would be to make ad-hoc repayments once a cash sum has been saved.
- People who may receive an unexpected windfall in the future
- Parents who may wish to gift to their children for financial reasons (e.g. house purchase) knowing they will be repaid over a future term
- Those at Pre-state pension age, need a capital lump sum now, but may wish to repay chunks back in the future from their extra income
- The list could go on…
What to do next…
If you have been dissuaded by equity release early repayment charges in the past, then take a close look at this exciting new plan from Hodge Lifetime. The ability to repay 10% off the balance each year with NO penalty is unique.
With an opening offer of a reduced valuation fee of £99 for property values upto £350,000, this certainly looks likely to follow hot on the heels of Stonehaven’s Interest Select Plan.
For further information or to request a quote please visit Equity Release Supermarket’s dedicated Hodge Lifetime Lump Sum equity release page. Alternatively call the team on 0800 678 5159.
Tags: equity release, equity release schemes, Equity Release Supermarket, free valuation, Hodge, Hodge Lifetime, interest only lifetime mortgage, No early repayment charges, roll-up
Posted in Interest Only Lifetime Mortgage, News | No Comments »
Monday, March 12th, 2012
Equity release schemes and equity release remortgage deals allow you to extract the equity tied up within the bricks & mortar of your home. The tax free cash is withdrawn usually by a lump sum or in the form of monthly income. This is a type of loan is for property owners over the age of 55 and is one of the best ways for such people & property owners to borrow money. Equity release plans typically do not need to be paid back until the sale of the home, or the borrower has died or gone into long term care.
Why have equity release schemes become so popular?
Homeowners opt for equity release plans for many reasons & their uses have extended beyond their original concept. Gone is the original ideology that equity release schemes would pay for pensioners essential living demands. Instead the flexibility & uses of equity release schemes have diversified into areas such as inheritance tax planning, moving home & many more besides.
They may have grandchildren entering university, and education tuition fees to pay; they may want to travel the world to meet distant relatives or loved ones; purchase a new car that maybe more economically friendly & cost saving; they may have a child that is soon to wed & needs a deposit for that first step on the property ladder; or they may want to consolidate their debts such as mortgage, loan & credit cards in order to free up & release some disposable income. These are all wonderful & purposeful reasons to choose an equity release mortgage. At the end of the day you just want to retire and relax throughout the longest holiday of your life.
How to Compare Equity Release Deals
There are various providers and independent specialists and a variety of equity release remortgage deals available on the market. In the tough economic times, there are few property owners that would not benefit from an equity release deal; however many homeowners are unaware that they have a solution to their problems with an equity release loan. It is important for the retirees to understand how these UK equity release plans work and how to shop around and compare all lifetime mortgages & home reversion schemes to find the best deal available on the market.
The most convenient means to compare equity release deals is on the World Wide Web or more commonly termed – the Internet. There are many equity release providers and schemes that operate home equity loans. These include schemes such as roll-up lifetime mortgages that allow you to extract an initial lump sum with the interest being charged, & compounded onto the previous year’s balance. The flexible & now more popular scheme is the drawdown lifetime mortgage that allows you to take a smaller initial lump sum that is agreed upon at commencement of the loan and then further amounts as you wish. There are advantages and disadvantages to each.
When you compare equity release, you should work with a company that offers advice and guidance and one that has the contacts in the industry to present you with the best deals available on the market. Equity Release Supermarket has a comparison table that identifies the best interest rates, cashback deals & free valuations for you. Click here to visit the compare deals table.
All Equity Release Supermarket financial advisers are independent & FSA trained and accredited and it is essential that the deal that you opt for meets the FSA standards and SHIP regulations. This will ensure that you have a deal that is safe and fair.
Why Now Might Prove to Be a Good Time to Take Out an Equity Release Policy
A combination of the current crop of exclusives has provided a cheaper route to market for many new equity release applications. However, this is not the only reason for the equity release industry being more confident these days.
A recent spate of rate reductions for the 3 major equity release companies has resulted in some of the lowest interest rates for the past 5 years. Aviva’s recent reduction on its Lifetime Flexible drawdown plan has scuppered plans for Just Retirement to be the market leader. In fact Just Retirement has now thrown in the towel in its quest to become the cheapest lifetime drawdown scheme currently available & is now targeting other areas for domination.
The current exclusive Aviva equity release offered by Equity Release Supermarket is as follows: -
Product - Aviva Lifestyle Flexi Plan
Interest rate - 5.92% fixed for life
Offers - Free Valuation PLUS £500 cashback on completion
If you wish to take advantage of this Aviva deal then request a quote or contact the Equity Release Supermarket team on 0800 678 5159 where one of our advisers will be happy to assist.
Tags: Aviva, Aviva Lifestyle Flexi, cashback, drawdown equity release, equity release, equity release schemes, Equity Release Supermarket, free valuation, FSA, home reversion, Just Retirement, Roll up lifetime mortgage, SHIP
Posted in Equity Release | No Comments »
Tuesday, March 6th, 2012
Prior to applying for a equity release mortgage, it is crucial to compare the whole of the equity release market. Even a slight difference in the equity release interest rates can have a significant impact on the compounding of the interest over the life of the loan. The question boils down to how to go about comparing the market to find the best equity release deals.
How to Compare the Market and Find the Best Equity Release Plans
It is essential to find a company that can provide you with independent advice on equity release interest rates and information on the various equity release schemes that are available in today’s market place. It is crucial to know where to shop for providers or a local, independent adviser that are FSA regulated and can help guide you with advice on equity release schemes. The idea of equity release is to be able to access and extract equity that would otherwise have been tied up within the property. There is much to understand about the different types of equity release products, hence the reason why independent equity release advice should always be found.
Where to look for the best equity release deal
There are various sources to locate equity release deals. Your best & quickest source is likely to be the internet. When you begin to look at the various equity release schemes, it is essential to find a deal that is safe. UK homeowners have the advantage as most equity release mortgages are regulated by the Financial Services Authority, so borrowers have a more protection and assurance that they receive a fair and safe equity release remortgage advice.
When you decide upon the right equity release scheme it is essential that the company that you work with is FSA accredited and trained and to make sure that your deal meets the FSA standards and regulations. For the best protection, the company should also be a member of the Safe Home Income Plans trade body (SHIP). These factors will help to ensure that you receive the best advice on equity release and the best deals.
When you shop for the best equity release scheme/deal you must understand that with most of the loans, repayment of the loan is required on the sale of the house, or at the time of passing. This means that it is important to calculate and understand the cost to pay back the loan over various amounts of time. If you do not see yourself moving again in your lifetime, then chances are the loan will be paid back at the time of your death, and there is no real concern that you may not have enough money going forward.
Your adviser should be able to present you with a number of tools that will help to answer questions you may have, such as, “what will my maximum lump sum be?” Tools will be provided through equity release calculators and tables that allow you to research the latest mortgage interest rates and compare. Free valuations, cash back offers and reduced interest rates should all be something that you look for in a deal.
A specialist that offers advice on equity release and helps to guide and direct you on your best options to ensure that your requirements are met and can offer whole of market, retirement solutions that are tailored to your needs should be a priority. Your search can begin on the internet, as this is the most convenient means to shop, and compare at your leisure with no pressure.
If you are looking for the best equity release deals then look no further than Equity Release Supermarket. With excellent relationships with all equity release providers we receive exclusive deals & interest rates. The latest rate reductions have now fallen below the 6% barrier with the likes of Aviva and couple this with a £500 cashback & free valuation equity release deals have never been better.
If you require any information on the latest deals call the equity release team on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk.
Tags: Aviva, compound interest, equity release, Equity Release Adviser, Equity release calculator, equity release schemes, Equity Release Supermarket, No negative equity guarantee, roll-up interest
Posted in Advice, Calculator, Equity Release | No Comments »
Saturday, February 18th, 2012
There is no denying the fact that an impaired life or enhanced equity release plan sounds a little cold and cruel – after all, the actuaries at the insurance companies have number crunched their statistics to come up with a more attractive plan if you are able to prove that you’re less likely to live as long as the average person. However, just for once in this world, this is a type of financial plan that could definitely work in your favour if you are in poor health – now how often does that happen?
Bearing in mind that the standard equity release plan will be based on an average life expectancy (of say around 80+ years of age), standard plans presume that the client will remain within their property for a certain number of years. Therefore, the equity release UK company will have to wait until the clients have either passed away or moved into permanent residential care before they are able to finalise the plan and reclaim their equity in the property.
If you qualify for the impaired life equity release scheme you would prove to the equity release provider that you are unlikely to remain within your property for such a long period of time and therefore the lender would be able to finalise the plan more quickly. This is where more favourable rates and payouts may be available to an applicant for an impaired life equity release plan and this can even be around 30% more advantageous.
Applying for an impaired or enhanced equity release plan is only slightly more involved than the standard lifetime mortgage or home reversion plan; you will be required to complete a short health & lifestyle questionnaire that asks if you have ever been diagnosed with certain medical conditions. At the end of the application, if it is presumed that your life may be impaired, you could qualify for a much bigger lump sum from your equity release plan.
Just as it is possible to use an equity release calculator to ascertain the expected level of payout for a standard policy, so too can you use this tool to work out what level of payout would be available for an impaired life equity release plan. However, these impaired life equity release calculators are not always entirely accurate. These reason being is that some enhanced equity release lenders such as more2life have varying degrees of enhancement. This is due to the severity of the ill-health the applicant maybe experiencing. The greater the number of illnesses, the greater the potential equity release tax free lump sum.
There are very few times in this life where ill health can actually deliver a better financial reward, but with impaired life equity release schemes from the likes of: -
If you can get past the actuaries working for these equity release providers and would really appreciate some much needed cash at the moment, investigate the possibility of such an impaired life plan and get out there and start living your life to the full.
Equity Release Supermarket has access to impaired or enhanced equity release schemes. These come with exclusive offers such as free valuation & cashback deals. To receive a enhanced equity release quote or product factsheet please complete our contact form.
To evaluate whether you qualify why not call the equity release team on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk.
Tags: cashback, enhanced equity release, enhanced lifetime mortgage, equity release, Equity release calculator, equity release schemes, Equity Release Supermarket, free valuation, impaired life, lifetime mortgage schemes, lifetime mortgages, more2life, Partnership
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Friday, February 10th, 2012
Just as you thought things couldn’t get much better with equity release interest rates, Stonehaven have joined the latest interest rate war by announcing the lowest annual interest rate yet of just 5.89%.
It looks like Aviva & Just Retirement have stirred up a hornets nest within the equity release market.
Stonehaven equity release have stated they will be reducing their lifetime mortgage interest rates across their whole product range with effect from Monday 13th February 2012. With their benchmark gilt rate now falling to just over 2% they have reduced their interest rates accordingly & maybe more reductions to follow?
The greatest reduction has been on their interest only lifetime mortgage product – Interest Select Max which offers the highest loan-to-value. This has been reduced from 7.57% down to 7.10% monthly.
For comparison purposes, on a £50,000 Stonehaven Interest Select Max mortgage, the monthly payments would have reduced from £315pm down to £296pm. A saving of almost £20pm.
However, the greatest reduction is evident the lump sum product range & it seems Stonehaven are now trying to capture more of the lump sum equity release market. Hence their slightly aggressive stance in lowering below Aviva’s 5.92% rate announced only the other day.
Their niche interest only lifetime mortgage has played a major role in assisting people who have been left stranded by the recent withdrawal of the Halifax Retirement Home Plan.Without the Stonehaven interest select mortgage, there would be no other interest only lifetime mortgage lender in England & Wales.
This is due to the fact that Stonehaven only lend in England & Wales, which means that people in Scotland & Northern Ireland still need to source alternative lenders should they be looking for interest only mortgages. Equity Release Supermarket can still assist here but please contact us on 0800 678 5159 for details.
Details of Stonehaven’s new interest rates are as follows: -
Lump Sum Lite 5.89% (was 6.13%)
Lump Sum 5.98%
Their range of interest only lifetime mortgage rates are as follows: -
Interest Select Lite 6.08% (was £6.13%)
Interest Select 6.17%
Interest Select Plus 6.46%
Interest Select Max 7.10%
If any of these new deals are of interest to you, please contact the Equity Release Supermarket team on 0800 678 5159 where an adviser can provide guidance as to which Stonehaven equity release mortgage would be suitable.
Alternatively, you can email on mark@equityreleasesupermarket.co.uk
Further links for Stonehaven are as follows: -
Request a Stonehaven Quote | Stonehaven Factsheet | Stonehaven Deals |
Request Stonehaven Advice
Tags: Aviva, equity release, Equity Release Adviser, Equity release interest rates, equity release schemes, Equity Release Supermarket, Halifax Retirement Home Plan, interest only lifetime mortgage, interest only mortgage, Just Retirement, lifetime mortgage schemes, lifetime mortgages, Stonehaven, Stonehaven equity release, Stonehaven interest select
Posted in Halifax Retirement Home Plan, Interest Only Lifetime Mortgage, News, Stonehaven Interest Select | No Comments »
Tuesday, February 7th, 2012
Aviva today announce an exclusive 5.92%pa interest rate to Equity Release Supermarket on its Lifestyle Flexi plan.
News had it that 2012 was going to be a breakthrough year for the Equity Release Market. Today this statement was confirmed.
The first sub 6% annual interest rate for over 5 years will have a major impact on the equity release market & confidence in general.
Ironically enough, this followed news earlier in the day from Just Retirement that it had just reduced its own rate in reaction to Aviva’s a week earlier. The new Just Retirement rate of 6.15% pa was considered extremely competitive until Aviva gatecrashed their party later on in the day.
Today’s groundbreaking news on the Aviva Lifestyle Flexi plan has come hot on the heals of my previous news items of 27th January & 30th January in announcing earlier Aviva and LV= rate reductions.
So why is there such an equity release interest rate war currently?
We need to look at the market as whole, the recent economic factors & how these companies are funded.
Both Aviva & Just Retirement are big annuity providers & companies with the backing of annuities have been able to ride the storm, ever since the credit crunch began a few years ago. You may be aware that most equity release companies with bank funding such as Saffron, Coventry Building Society & Hodge Lifetime to some degree, have dropped out of the market. Longer term funding has been an issue for them.
However, this doesn’t answer the whole story, so lets look a bit deeper…
We have mentioned the credit crunch. It is evident first hand from our Equity Release Supermarket data that a significant element of equity release loans are for financial, rather than lifestyle factors. This means there is a greater emphasis on ‘need’ rather than ‘wants’.
Retirees in general are finding retirement a financial struggle in trying to make ends meet. Overall attitude towards retirement & their legacies has also changed over the years with a more ‘live for today’ motto. With drawdown equity release plans becoming increasingly popular, this lends true to our analysis.
People are taking just enough for today to clear debts, help the kids & have a small amount behind them to provide that ‘cushion’ that provides them with a feel good factor.
The Aviva Lifestyle Flexi Deal in Finer Detail
- Market leading fixed interest rate of 5.92%
- £500 cashback on completion
- FREE valuation upto £1 million
- Drawdown equity release scheme
- Earliest age for application of 55 years
- Minimum £10,000 initial loan
- Minimum property valuation of £75,000
In addition to the great news on their lowest interest rate for years, now is as good time as any to take out an Aviva Equity Release Plan. With both a £500 cashback & free valuation offer, the net set up costs for an equity release application are now minimal. With Equity Release Supermarket’s advice fee being lower than its major competitors, then now is the time to seriously considering taking out an equity release plan with Equity Release Supermarket, if you have strong intentions to do so anyway.
Early Repayment Advantages with Aviva
With GILT rates at a current all time low, it would also favour equity release lenders who use gilts to govern their early repayment charges. Aviva use an individual government gilt to measure whether a future early repayment charge will apply. The yield of this gilt is noted on the day the equity release plan starts. Upon redemption, the yield is noted at that point & gauged to see whether it has it increased or fallen during that period.
Should the gilt yield have increased or stayed the same then NO penalty will apply. Aviva will even permit a reduction of 0.12 basis points before even applying a penalty.Therefore, with gilt rates currently being so low, there is less likelihood of the yields falling today than ever previously. However, this cannot be guaranteed & if you are considering early repayment then speak to our team of advisers first.
With a national team of equity release advisers who can provide both face-to-face & phone based financial advice, we are only a telephone call away from offering you a market leading equity release deal.
If you would like to take advantage of a free initial consultation regarding the Aviva or any other equity release mortgage, please call the Equity Release Supermarket team on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk
The following links provide further equity release information: -
Request an Aviva quote | Request a Just Retirement quote |Find an local adviser
Equity Release Calculator
Tags: Aviva, cashback, drawdown equity release, equity release, Equity Release Adviser, Equity release calculator, Equity release interest rates, equity release schemes, Equity Release Supermarket, free valuation, Just Retirement, lifetime mortgage schemes, lowest interest rate
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