Posts Tagged ‘equity release’
Tuesday, 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?
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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.
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So why was the Halifax Retirement Home Plan Withdrawn?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.
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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 17th August 2011 at very short notice.
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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!
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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?
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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.
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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.
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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!
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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
Posted in Interest Only Lifetime Mortgage | No Comments »
Saturday, 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.
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‘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!’
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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.
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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
Posted in Equity Release, News | No Comments »
Friday, November 11th, 2011
Equity Release Supermarket is pleased to announce its new equity release deal from Aviva.
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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…
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‘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.
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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.
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*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
Posted in Equity Release, News | No Comments »
Wednesday, 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.
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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.
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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.
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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.
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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.
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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.
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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 »
Tuesday, 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?
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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.
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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.
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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.
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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%.
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A few other benefits of SHIP (Safe Home Income Plans) equity release schemes are:
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- 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
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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.
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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
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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
Posted in Equity Release, Interest Only Lifetime Mortgage | No Comments »
Monday, October 10th, 2011
People think that going directly to equity release companies rather than going through an independent equity release adviser will save time and money. This is not really true.
There are intermediaries such as Equity Release Supermarket who can research the whole of the equity release market which in itself includes over ten equity release providers. Each company themselves may then have several different equity release products which opens a plethora of options for the proposed buyer.
So how can approaching one individual company therefore provide the customer with the best advice? Obviously not.
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So should equity release intermediaries be your only option?
Direct companies offering equity release schemes are now few & far between. Most equity release lenders realise the importance of providing quality advice & ensuring the consumer receives best advice. Again companies like Equity Release Supermarket will receive more favourable equity release deals than if the customer went directly to any lender.
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If we take Aviva for example.
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Their direct sales force has been drastically cut for its halcyon days from over 10 years ago when competition was not so fierce as only a few lenders offered equity release plans. Marketing costs & the funding of a direct sales force comes with a huge financial burden. Company cars, pension schemes & basic salaries plus bonuses all need to be paid for & by whom…the customer.
Compare this to a company such as Equity Release Supermarket. Aviva do not incur any marketing costs for them, no salaried sales force with company cars, so the savings can be allocated elsewhere for such intermediaries.
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This is shown in the product offering & the competitiveness of the interest rate & deals Equity Release Supermarket receive from Aviva, which can then be passed onto the consumer. Currently there is over 0.5% disparity between the Aviva drawdown scheme sold via Equity Release Supermarket & that sold by Aviva direct. Equity Release Supermarket can offer a special interest rate of just 6.32% & they can also currently offer a free valuation on properties upto £250,000.
The only extra fee involved with an equity release intermediary firm will be the advice fee they charge. However, this would seem a fair price to pay for knowing you have the best Aviva equity release deal in the market. This could be possibly saving £270 on the valuation fee & depending on the size of the release applied for could amount to many £1000′s in interest by having a much lower interest rate!
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Criteria to be an equity release advisor
A lot of equity release scheme providers get their message through to the public via the media; however this alone does not explain all the terms and the details in depth. To understand each and every aspect of a certain scheme one has to have a good knowledge and an in-depth expertise of the terms used in the market as a whole. If equity release is not for you, your independent advisor will should tell you so. They will also consider any financial alternatives such as downsizing, using savings etc before arriving at an equity release recommendation.
Professional independent equity release advisors must have the appropriate licences in order to carry out any business. They must comply with all the rules and regulations of the Financial Services Act & deal with equity release schemes that are members of SHIP.
Therefore, always do your research & find an independent financial adviser who is local to you & who will take the time to understand your requirements & find the best equity release UK scheme for you.
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If you require independent equity release advice with a no obligation appointment, please call the Equity Release Supermarket team on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk.
Tags: Aviva, Aviva drawdown equity release, equity release, Equity Release Adviser, equity release schemes, equity release UK, independent financial adviser
Posted in Equity Release | No Comments »
Tuesday, August 2nd, 2011
Confusion reigns at a time in life when stability, financial security & freedom to enjoy the fruits of one’s success should be evident. Yes, we are talking retirement, equity release & the increasingly popular Halifax Retirement Home Plan.
We discuss the options available to those already retired or the up & coming baby boomer generation, as they prepare to assess how they are to manage in today’s financial maelstrom.
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For many, & usually it all boils down to lack of financial planning in earlier life; retirement is none of the aforementioned attributes associated with the longest holiday of your life.
We all go through life thinking retirement seems a distance over the horizon. From getting that first job, raising the children & moving up the ranks in the employment world, our lives move forward apace.
But the inevitable will reach us all one day & without foresight retirement could be the biggest challenge in your lifestyle thus far.
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So how should we prepare & how do we invest in our futures to ensure a retirement of fulfilment?
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The spoken word, ‘hope for the best, prepare for the worst’ must have a ring of truth when it comes to retirement planning. It’s a recipe on the menu that’s always put on the back burner & one on the ‘to-do’ list of things that can wait until tomorrow…YOU CAN’T.
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Looking back at that first job is where the seeds should initially be sown. Whether it’s joining that company pension scheme or making your own provision, a pension should be the life jacket for your retirement.
The old adage of the earlier you start a pension the less you need to pay in later, is gospel & with the tax advantages on offer they still represent one of the best ways to build a pot of gold for the future.
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But there are other options now available which represent a safer alternative & more hands on approach such as real estate.
The buy to let market is currently undergoing transformation in the current economic climate, with rental incomes outstripping savers returns on bank & building society accounts. There is also the potential capital appreciation aspect of owning a property which has been a tried & tested route for many over the longer term.
Property is a tangible asset; you have control over how it looks, you can manipulate it & affect its value. The sole aim of these actions is to build asset value & thereby probably without hindsight, can build yourself a ‘retirement vehicle’.
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So let’s see which vehicle will suit your requirements & enable you to navigate down the retirement highway…
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Firstly, the question that needs to be asked is whether an income or capital lump sum is required? Given the fact that most tax free cash requirements are for capital, the options are then narrowed down to affordability in retirement.
The next important consideration is whether one can support the monthly payments of an interest only mortgage, or are finances so tight that no further monthly payments are required throughout retirement. The answer to this will filter us towards the ultimate decision; that is whether the solution is an interest only lifetime mortgage or a roll-up equity release scheme?
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On the one hand you have an interest only mortgage, where monthly payments are required to be maintained for the rest of your life & results in a continuously stable & level balance during the remaining term.
This is in complete contrast to a roll-up equity release plan, which requires no monthly payments whatsoever, but allows the interest to compound & the balance of the mortgage to get larger.
Let’s have a look the features of each option further.
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Roll-Up equity release scheme
- Classified as a Lifetime mortgage, hence no term is specified
- Schemes are regulated by the FSA & are also members of SHIP
- Equity release schemes start at age 55
- No income required for eligibility
- Maximum release is 55% of the property value (with ill-health)
- Credit history is not a major concern to equity release companies
- No monthly payments required
- Increasing balance as the interest is compounded monthly or annually
- Flexibility of drawdown schemes available to take regular cash releases with guaranteed reserve facilities. This ensures future cash availability with no further costs.
- Interest rates are fixed for life
- Reduced, or no inheritance left for the beneficiaries of the estate
- Executors have upto 12 months in which to repay the lender, usually by sale of the property
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Halifax Retirement Home Plan
- Classified as a Lifetime mortgage, hence no term is specified
- Pensioner mortgage & regulated by the FSA
- Starting age is 65, however with enough pension income, over 55’s are acceptable
- Retirement income alone will determine how much that can be borrowed
- The maximum amount borrowed is capped at 75% of the property valuation
- Credit history is checked & any adverse record could result in a declined application
- Monthly payments must be maintained to avoid repossession
- Mortgage balance remains exactly the same throughout the plan term
- Further advance application required to borrow additional funds & will be credit assessed each time for affordability.
- Option of tracker & fixed rates available, initially for a maximum of 5 years. Therefore, no guarantee of the future costs of the monthly mortgage payments.
- Reduced inheritance, albeit a specific amount which the beneficiaries will know the extent
- Beneficiaries have 18 months in which to sell the property, after death or the mortgagors moving into long term care.
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So the winner is?
There is no actual winner in this pensioner mortgage market.
Both schemes have the advantages & disadvantages depending upon one’s retirement finances.
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However, if a good retirement & disposable income is available & future affordability secured, then certainly the Halifax Retirement Home Plan is justifiable for the applicants & more so for the beneficiaries. Nevertheless, it is vitally important that steps are also taken to protect each party to the interest only retirement mortgage in case one applicant dies as the survivor will still need to maintain the monthly payments. Therefore, life insurance should always be considered on the Halifax Retirement Home Plan.
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Alternatively, for those on lower incomes, less of a disposable income & are not too concerned about their children’s inheritance, then a roll-up equity release mortgage could be their preference. The roll-up equity release schemes have no effect on monthly budget & can never result in repossession based on lack of affordability or missed payments.
These schemes can be classed as a ‘mortgage of last resort’ as once all the alternatives have been considered & eliminated. Equity release roll-up can always be the backup plan. Even more so should one default or struggle with the affordability of an interest only lifetime mortgage such as the Halifax Retirement Home Plan, as equity release schemes can be used to clear the Halifax mortgage.
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The following is an equity release tip – to ensure that equity release can act as a safety net, if you are looking to borrow on a Halifax equity release scheme then always consider & keep within the loan-to-value limits of the equivalent equity release scheme rules. If you do this then you have equity release as a fall back to switch to in the future.
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There are many more tips & advice available on this subject, but as always seek an independent financial advisory service such as Equity Release Supermarket who are qualified & experienced in these two specialist fields.
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For help on deciding which type of equity release is best advice for yourself, please contact the Equity Release Supermarket advisory team on freephone 0800 678 5159 or email mark@equityreleasesupermarket .co.uk
Tags: equity release, Equity release calculator, equity release schemes, Equity Release Supermarket, halifax equity release, Halifax Retirement Home Plan, lifetime mortgages
Posted in Advice, Equity Release, Halifax Retirement Home Plan | No Comments »
Thursday, July 21st, 2011
Halifax equity release is a good option for retired individuals who want to live a tension-free lifestyle after retirement. Unlike traditional mortgage plans, Halifax equity release is specially designed for individuals who are looking for home safety along with a better lending choice. This mortgage option can be used to raise equity from your property if you are over age 55 & are now in receipt of retirement income.
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The money raised through the Halifax equity release mortgage can be spent the way you want. So, irrespective of whether you want to go on a holiday, exotic cruise or make home improvements, opting for equity release can be great at meeting your financial needs.
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With inflation constantly on the rise & budgetary constraints we are all facing currently, retired individuals also are facing a lot of problems coping with their finances. However, there are certain requirements one needs to fulfil in order to qualify for Halifax equity release schemes. For instance, applicants must be above 55, retired and possess property of their own. The amount of equity one can release through this scheme depends on the age, pension income & the market valuation of their property.
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So, if you are planning to go for Halifax equity release, it is always better to ensure that your property is well-maintained. Additionally, if you have a current mortgage on your property this will need to be repaid on competion of your new Halifax retirement mortgage. This will be paid for from the proceeds of the Halifax application & will be redeemed by the solicitor acting on your behalf. Therefore, whenever the interest only mortgage calculations are made the existing mortgage figure should always be taken into account.
The good news however, is that if you do have a current mortgage, no matter the size, & remortgaging to the Halifax Retirement Home Plan then there are some excellent deals available. As of July 2011, Halifax remortgages will provide a FREE valuation, FREE standard legal fees & on some products we can even obtain NO application fee.
As there are different Halifax equity schemes available today, you must carefully research your options. This way, you can go for one which suits your needs & receive advice from an independent equity release adviser who can provide you with best advice from the whole of the market.
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If you wish to discuss the current Halifax Retirement Home Plan deals via Equity Release Supermarket contact the team on freephone 0800 678 5159 or email mark@equityreleasesupermarket.co.uk
Tags: equity release, Halifax, halifax equity release, Halifax equity release schemes, Halifax Interest Only Mortgage, Halifax Retirement Home Plan, Home Retirement Plan, interest only mortgage
Posted in Halifax Retirement Home Plan | No Comments »
Sunday, July 3rd, 2011
More great news for the increasingly buoyant equity release market as Partnership re-enter with their Enhanced Lifetime Mortgage plan.
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Specialists in impaired life annuitys; Partnership are now bringing their underwriting expertise to equity release schemes. The logic behind their offering, provides a bespoke underwriting event for each client looking to achieve a maximum equity release status. Their experience from the enhanced annuitys market has led to a radical re-think in the equity release market where effectively the same principles can apply.
Consideration for impaired life equity release schemes is certainly gaining momentum as rumour has it other equity release companies such as Aviva may also be looking into the possibility of developing their own impaired product. In fact any of the existing equity release providers who offer an annuity proposition could be in the market with potential launches under their wings?
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So what is an impaired life equity release scheme?
Well firstly lets have a look at how an impaired life annuity works…
Primarily, an enhanced annuity provider will ask the annuitant a series of health questions which dependent upon their health conditions & severity, will determine the size of the annuity pension they will receive. In essence, the worse their health is the better, as they will potentially receive a more sizeable pension due to their life expectancy not being as long as a healthy person.
It may sound crude, however Partnership’s years of underwriting experience allows them to now offer the same principles in the equity release market by offering a bigger lump sum than standard equity release providers. The maximum release, dependent upon the health questionnaire is 55% of the property value.
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What illesses will qualify?
The questionnaire itself is not as detailed as one would imagine. Likewise the number & severity of the qualifying conditions is lower than expectations, thus making the underwriting aspect of the equity release plan simplistic in assessment. The health questions are as follows:-
- Have you smoked 10 cigarettes per day for the last 10 years?
- Have you been diagnosed with high blood pressure, requiring ongoing medication?
- Have you suffered a heart attack requiring hospital admission?
- Do you suffer from diabetes, requiring insulin or tablet treatment?
- Have you suffered from a stroke (CVA), excluding mini-strokes (TIAs)?
- Have you suffered from angina, requiring ongoing medication?
- Have you been diagnosed with cancer requiring surgery, chemotherapy or radiotherapy?
- Have you been diagnosed with Parkinson`s disease?
- Have you been diagnosed with multiple sclerosis?
- Have you taken early retirement on the grounds of ill health?
- Are you currently taking any prescription medication?
Given this information, the online Partnership equity release calculator will then produce a maximum lending figure taking also into account age(s) & property valuation. A signature will then be required on a declaration form to confirm the medical questions have been correctly answered as only a sample number of applications will actually be looked into with the clients general practioners. This makes the application process quicker & smoother putting the onus on the applicant accurately qualifying their ailments.
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Are their any other features in Partnership’s enhanced lifetime mortgage scheme?
The simple answer to that is yes.
Partnership have managed to squeeze in some important features that provide additional security & protection for applicants. Aside from being a member of SHIP & thus passing the protection features of the no negative equity guarantee, assured tenancy & ability to move home, there is also an Inheritance Protection facility.
The inheritance protection feature is included at no extra cost & provides the ability to protect a part of the final sale proceeds which can then be successfully passed onto the heirs & beneficiaries. Therefore, peace of mind reigns when the biggest objection to the use of equity release schemes is ‘how much will be left for the children when I die’.
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What is their lending criteria?
The Partnership Enhanced Lifetime Mortgage is currently only available in England & Wales on property valuations over £70,000. Their approach to property types is standard amongst the industry, although they will permit borrowings on some concrete build constructions such as Laing Easy Form & Wimpey No Fines which down to the valuers comments would pass as acceptable.
The minimum age of the youngest applicant must be 60 & at least one suffering from one of the aforementioned illnesses/conditions. The minimum loan on application is £25,000 which is higher then most equity release providers, however the plan is pitched at the higher release end of the lifetime mortgage market.
The major factor setting themselves aside from the alternative impaired life equity release offering from more2life is the FREE cost to market for any applicant. Partnership have initially launched with a tempting proposal of a FREE valuation & NO application or completion fee payable on set up. In fact they even go one step further with a CASHBACK of £250 on completion which goes some way to offsetting any legal fees incurred.
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Again, thanks to companies such as Partnership showing innovation, the equity release market has shown its durability over the past 12 months at a time of economic diffculties. Perhaps the old days when the two words – ‘equity release’ & ‘apprehension’ were associated, are now becoming more of a distant memory.
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If you would wish to find out whether you would qualify for an enhanced lifetime mortgage with Partnership, please fill in this Partnership enquiry form or call freephone 0800 678 5159.
If you smoke manufactured cigarettes, have you smoked 10 or more cigarettes per day for the last 10 years?
If you smoke rolling tobacco, have you smoked more than 3ozs or 85g per week for the last 10 years?
Have you been diagnosed with high blood pressure, requiring ongoing medication?
Have you suffered a heart attack requiring hospital admission?
Do you suffer from diabetes, requiring insulin or tablet treatment?
Have you suffered from a stroke (CVA), excluding mini-strokes (TIAs)?
Have you suffered from angina, requiring ongoing medication?
Have you been diagnosed with cancer (excl. skin cancer and benign tumours) requiring surgery, chemotherapy or radiotherapy?
Have you been diagnosed with Parkinson`s disease?
Have you been diagnosed with multiple sclerosis?
Have you taken early retirement on the grounds of ill health?
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Tags: enhanced lifetime mortgage, equity release, equity release schemes, impaired life, lifetime mortgage schemes, maximum lump sum, more2life, No negative equity guarantee, Partnership
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Friday, July 1st, 2011
An increasing number of senior citizens now opt for equity release schemes with the aim to release cash (equity) from their property. This can be a wise decision in order to generate extra income during their retirement years. While a lot of equity release providers are available, not many people are aware of how such equity release schemes work. At such times, it is prudent to consider taking advantage of professional help.
Financial institutions now offer the use of equity release calculators to their customers. Using this tool, one can determine the amount of equity that can be released from their property. Based on the outcome, the applicants can decide whether or not equity release is a viable option for them.
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With the number of equity release schemes on the increase, such as the recent addditions of Stonehaven, more2life, New Life Mortgages & last week Partnership, it is more important than ever to seek the services of an FSA qualified independent financial adviser. They will have the equity release tools available they will have been trained with to establish which scheme will provide the correct amount to be released. Guarded with this information it can lend them to the next stages of the decision making process in ascertaining which lifetime mortgage scheme is most suitable for such circumstances.
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Therefore, the equity release calculation can be guided towards establishing the following lifetime mortgage scenarios: -
- What is the maximum I can borrow on an equity release plan?
- What is the lowest interest rate on an equity release scheme?
- What is the minimum amount I can borrow on a lifetime mortgage?
- How much can I borrow on an equity release scheme if I am in poor health?
- What are the costs in setting equity release schemes up?
Equity release calculators will help answer these types of questions & with the calculator tools of Assureweb, Trigold & The Exchange each equity release adviser with the CeRER & CeMap qualification, will have these methods of calculations available.
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The workings of an equity release calculator
Various equity release calculator formats exists that can usually be found on the website of the mortgages & other financial organisations. The homeowner first needs to provide information related to their property. Based on this data, the equity release calculator will predict an approximate amount of equity that can be released from their property.
Advanced calculators are also available that offer in-depth information related to different possibilities. However, the availability of such a tool is subject to the equity release provider. Before deciding on a deal, homeowners are always advised to try two different calculators. To get the best deal with equity release schemes, obtaining professional help would be wise.
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Practically, the size of the equity release is governed mainly by three factors which are: -
- Age of the youngest applicant
- The valuation of the property
- Whether any existing mortgage or secured loan is present
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Dependent upon the answers to these questions will determine the net equity release availability from the property. The data provided by the equity release calculation will be the maximum equity release posssible, however it will give an indication of the extent to which one can go & therefore tyou will have the knowledge as to whether equity release will be of assistance.
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More detailed equity release calculators can advise beyond these basic measures. For instance, should a history of ill heath be present, then a larger than normal lump sum can be achieved with an impaired life equity release scheme. This will not be present or have the ability to be calculated upon by the more basic equity release calculators. Additionally, the majority of calculators will only refer to roll-up lifetime mortgages & not home reversion plans, thus they do not answer the whole question & should only be used for guidance, not literally.
Again, it is therefore of upmost importance to seek the services of a qualified independent equity release advisor who has the accurate research & calculation tools at his disposal; whom with your input & personal information, can guide you to the right equity release plan.
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The Equity Release Supermarket calculator can provide an overview & the statistics involved with the maximum amount that can be borrowed on each equity release scheme. Experience our equity release calculator today as see how much you can release. Alternatively, speak to one of the Equity Release Supermarket specialists who can be found in your area by using the ‘find an adviser‘ interactive UK map.
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Equity Release Supermarket are established & award winning lifetime mortgage & Halifax Retirement Home Plan specialists.
Call freephone 0800 678 5159 for all your post retirement mortgage questions.
Tags: calculation, equity release, Equity release calculator, equity release schemes, Equity Release Supermarket, impaired life, more2life, New Life Mortgages, Partnership, Stonehaven
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