Equity Release Latest News

Posts Tagged ‘FSA’

The FSA is now the Financial Conduct Authority (FCA)

Friday, May 31st, 2013

The financial market is one that typically needs strict oversight to help regulate the marketplace, making it a safe and comfortable place for consumers to invest and plan financially. Reassurance is key to a successful & thriving financial services industry.

 

Most consumers know the Financial Services Authority (FSA) to be the overall regulator of the financial industry. However, as of April 3, 2013, the regulator known as the Financial Services Authority (FSA) has undergone changes and has been renamed the Financial Conduct Authority (FCA).

 

There are several reasons for the change and there are also some impacts that may be felt by consumers, smaller firms, and accountants. For all intents and purposes, the FCA will be a more intense champion for the consumer than the FSA. The Financial Conduct Authority will better aid the average consumer and investor in finding the right products and investment strategies.

 

Despite the recent change, there are still several aspects of the regulator that have remained constant. For one, the Financial Conduct Authority will be largely staffed by the same people that staffed the FSA. They will be working out of the same location and will be regulating the same financial services and firms that were regulated under the FSA.

 

However, there are some differences between the FSA and the Financial Conduct Authority. The biggest of these changes is the idea that the business of regulating the capital adequacy of the largest financial firms, approximately 1,700, is now outsourced to the Prudential Regulation Authority (PRA), which a sister regulator of the FCA. Under the PRA, the Financial Policy Committee (FPC) will be overseeing the “macro” issues relevant to the industry. Both the FPC and the PRA are essentially a part of the Bank of England.

 

The Financial Conduct Authority has also gained some authority and power that was lacking in the FSA. For one, the FCA can intervene in the promotion of market-wide products. This means that the FCA has the power to ban the sale of fraudulent products.  This means that the FCA may have a stronger presence when it comes to advocating for the consumer’s best interest. This can only be good for the consumer and genuine financial advisory services companies.

 

For consumers, the change from the FSA to the FCA may not be felt very strongly. However, the FCA is an advocate for the consumer. The regulator allows the consumer to have a market place that promotes reliable products to the consumer. Without the FCA, consumers would have a much more difficult time planning for their financial futures.

 

All promotional materials showing the FSA are to be phased out by April next year, however many firms have already taken the initiative, embraced the changes and adopted the new Financial Conduct Authority as the necessary changes to keep on improving the industry.

 

Equity Release Supermarket are directly authorised by the FCA with permissions under their FCA no 584063. For assurance purposes all financial services firms can be checked on the FCA register to ensure they are fully authorised, or even what permissions and authorisations they have. To check any companies details click this FCA register link.

 

In addition for equity release purposes, we only recommend lifetime mortgage & home reversion schemes from companies that are members of the Equity Release Council. Both authorities combined, provide the assurance to our customers that Equity Release Supermarket provide the exact standards required to offer our customers peace of mind & the security that regulation can offer.

 

If you have any questions about the impact of the FSA/FSA changes or further details on the Equity Release Council contact Mark Gregory on 01925 830816 or email mark@equityreleasesupermarket.co.uk.

 

What Are My Options if I Still Have a Mortgage When I Reach Retirement Age?

Monday, November 12th, 2012

Retirement mortgages are becoming a rare breed. Nevertheless, with good research provided by an experienced equity release adviser, there are still such products available for the over 55’s. Products such as the Stonehaven Interest Select Plan are a good alternative to the now withdrawn Halifax Retirement Home Plan mortgage. If you have a pre-existing mortgage when you reach retirement age, there are certainly some options that are still available for you to consider.

 

Firstly, it is important to consider the changes in your income when you reach retirement. If your income during retirement still allows you to sustain the pre existing mortgage then the mortgage can be continued for a period. This will however be determined by the term of your existing mortgage and the attitude of your mortgagee. We have recently seen that since the FSA report into interest only mortgages, that residential mortgage lenders have revised their terms and attitude towards this sector of the mortgage market.

 

The repayment vehicle is where the issue has fallen down. Many people have taken interest only mortgages and for one reason or another never taken out the repayment vehicle that was meant to have provided the funds to repay the mortgage with at the end of the term. This has left a time bomb waiting to go off due to the sheer numbers of people with interest only mortgages now hitting their retirement years.

 

Affordability going into retirement is the one aspect of retirement planning most people do not look ahead for. Their income will fall as full time employment will usually cease and pensions as we all know have not performed as the quotes originally showed when personal pensions were originally take out.

 

Therefore, upon attaining retirement age, if you are unable to afford the mortgage, it is necessary to take the correct steps to remedy the situation. Your existing lender should allow you to switch to another interest only mortgage provider, should one be suitable to meet your requirements. To be able to do this, the loan-to-value ratio will be key as to what options will be available upon remortgaging outstanding. Now that the Halifax Retirement Home Plan mortgage has been taken out of service, what options actually remain to switch to?

 

By considering switching to an interest only lifetime mortgage can allow you to make monthly interest payments; the balance remains the same, which is repaid once the property is sold. The question to ask yourself is whether you require the mortgage to run for the rest of your life or to tie in with future plans, such as downsizing, or you only want the mortgage to run for a fixed number of years. Remember, selling your property and moving to a smaller property and paying off the balance is an option worth considering. The answer to these questions will determine the correct retirement solutions for you.

 

Equity Release Supermarket currently has two interest only lifetime mortgage plans available. Therefore, if your current lender does not provide this option, and you wish to remortgage then find an equity release adviser who can provide details. We can advise on both the Stonehaven range of interest select plans, or the recently launched more2life Interest Choice plan on 1st November 2012.

*UPDATE 1/8/21013 – Equity Release Supermarket has today obtained access to the new innovative Hodge Lifetime Retirement Mortgage Plan – for further details click here

However, always look at the options before pledging your future to an interest only lifetime mortgage product. You could be entitled to retirement benefits that can help you cope with the existing mortgage. For instance you could be entitled to council tax benefit or pension credit which could have an impact on your income & mortgage affordability. Certain organisations such as Shelter can provide mortgage interest advice and support to those who are eligible. It is worth exploring these options that can help with making payments.

 

There may be other residential mortgages that you can consider switching to. However, these companies such as Leeds Building Society may only provide a temporary reprieve due to the limited term permitted. Most lenders will usually want full & final repayment by a maximum age of 70-75.

 

It is therefore important to seek professional advice in order to make a well informed and well researched choice. Switching to an interest only lifetime mortgage such as the Stonehaven Interest Select Lite is one such option, wherein you make monthly interest payments for life and the balance on your mortgage remains the same. With Stonehaven interest rates now only starting from 5.99% monthly and thereafter fixed for the whole duration, for those that qualify this is an excellent & secure option available to people over age 55.

 

If you wish to cease making any payments towards the mortgage, maybe as you have no children or close relatives, then roll-up equity release schemes may also be a good option for you. A roll up equity release is where no monthly payments are required as instead the interest gets added to the balance. The equity release deals from some roll-up companies are excellent at the moment with the incentives to help with set up costs. For instance, the Aviva Flexible lifetime mortgage starts with rates as low as 5.57%, depending on personal requirements and this is coupled with free valuations and three cashback options.

 

However, if the thought of your inheritance disappearing before your eyes when you receive your annual roll-up lifetime mortgage statement arrives then its worth looking at companies like Stonehaven and more2life. You should know that interest rates are currently the lowest ever for Stonehaven in their six year history. From the number of interest only enquiries we now have, many people have also noticed and taken advantage of tying themselves into today’s lowest interest rates and fixing them & their futures up for the rest of their lives.

 

To discuss your equity release options at retirement call the equity Release Supermarket team on 0800 678 5159 today.

Equity Release – The Only Way is Ethics

Sunday, October 21st, 2012

With news that equity release schemes are becoming more of a mainstream mortgage for the over 55’s, we look at how the equity release market is regulating the protection of its consumers.

 

We have all heard the stories of how equity release schemes are bad for you and the local gossip columnists berating the expense of these plans. However, the equity release industry has come a long way since the original equity release plans were offered in 1965 when the average house price was approximately £4,000!

 

Why was regulation introduced?

It was the earlier version of equity release schemes that started creating a stir. Back in 1988 a new type of plan was introduced called a ‘home income plan’. They relied on using two financial instruments – an annuity or investment bond to provide an income, which in turn paid an interest only mortgage that raised the initial capital. The annuity income would have been sufficient to not only pay the mortgage but also provide additional funds to supplement the applicant’s income.

 

In 1988, the principles of the scheme were sound. However, there was no account taken of how future interest rates may change after a years of economic stability. Therefore when interest rates rose steeply in 1990 and property prices fell significantly, there were unfortunate cases of people experiencing negative equity. Additionally, as a consequence of higher interest rates, the annuity income became insufficient to cover the monthly mortgage payments, thereby wiping out the residual personal income also. These home income plans were subsequently banned.

 

The launch of SHIP

Such disastrous events were the catalyst for greater regulation of these equity release type products and led to providers in this market forming a coalition. This was heralded as SHIP (Safe Home Income Plans) and was introduced in 1991 to protect the holders of such schemes and their beneficiaries.

 

Further bad news

However, the problems were not answered immediately. During the mid 1990’s we had certain banks – Barclays and Bank of Scotland introducing SAM’s (Shared Appreciation Mortgages). These schemes worked on the basis that the mortgagee released an amount of equity in return for a proportion of the house value. No monthly payments of interest were required. However, the banks took not just the current value, but also a percentage of the future value.

You may recall that the mid to late 1990’s house prices thereafter soared. The bias was obviously in the banks favour (no changes there) to the tune of approximately three to one in their favour in any property escalation.

These schemes were consequently withdrawn and we are still hearing stories in the news today about people who took out SAM’s & have no redress financially from the FSA.

 

Step forward the FSA

Sooner, rather than later the Financial Services Authority stepped in to regulate the market & by 2004 the Government had brought forth legislation protecting lifetime mortgage customers. The protection didn’t just stop with the schemes; financial advisers now came under the auspices of the FSA and had to meet certain criteria to be able to provide equity release advice.

The FSA then introduced the Financial Ombudsman Service and put the FSA Compensation scheme in place to recompense people who had been mis-sold. Previously, applicants only had the courts as protection and taking on the banks could prove an expensive exercise.

By 2007, Home Reversion schemes were also governed by the FSA leading to stricter controls on all types of equity release schemes.

 

By this time some of the major equity release companies such as Norwich Union (now Aviva) and Northern Rock had joined SHIP. Equity release schemes started going through innovation with drawdown equity release plans becoming popular and being released initially by Prudential, Just Retirement & Hodge Lifetime. With mixed attitudes towards beneficiary’s inheritance, we had the introduction of interest only lifetime mortgages from Stonehaven which allowed some, or all of the interest charged being paid off.

So, not only has the market emphasis changed towards regulation, but also the products themselves have seen massive changed in concept and design.

 

Further peace of mind – legals

So far we have talked about how the FSA has helped regulate the market and the equity release companies themselves designing better products, but what about the equity release process itself?

 

The legal aspects of equity release have now been indoctrinated within the SHIP rules. It is here that extra layers of protection have been provided by the equity release solicitors and provide the final checks of the equity application process. From checking the identity of the applicants, establishing genuine reasons for the raising of capital, particularly when gifting to family and ensuring legal title & conveyancing thereof, solicitors have an important role to play.

 

Under SHIP rules, two solicitors must be involved – one for the applicant & the second on behalf of the lender. This is to ensure there is no conflict of interest and protect both the lender & equity release customer. The applicant’s solicitor must also sign a SHIP certificate to state he is satisfied that all aspects of the equity release have been brought to their attention, implications & that the rules of ‘caveat emptor’ persist. Until the SHIP certificate is signed then no equity release application can complete.

 

SHIP update

Further rebranding of SHIP was felt necessary as the market grew and a louder voice was felt necessary for the equity release market as a whole. After much debate it was proposed that ‘The Equity Release Council’ would provide the new voice of the industry. SHIP has now moved on and hopefully the feeling and attitude to all things equity release. It has travelled much distance since 1965 and overcome some dark days along the way.

 

Nevertheless, this is a new dawn for the equity release industry. With greater trust, greater demand and greater product innovation still to come the future is looking bright for the protection of its customers.

 

If you are considering equity release and need assistance on receiving the best equity release advice call the team on 0800 678 5159.

 

A Whole New Ball Game Begins with Home Equity Release Schemes

Monday, May 21st, 2012

With interest rates being so low, and investments so sluggish, many people who had retired on a nest egg are starting to struggle. The crisis seems far from over so it might be time to consider other options for “topping up” those savings and the income that they create with a home equity release scheme.

 

Most home equity release plans come in many forms but the most common one now is the lifetime mortgage. This style of equity release mortgage is only available to those over the age of 55, as they include special features exclusively designed for elderly and retired people. This more vulnerable age group now has the protection of the FSA (Financial Services Authority) & the trade body currently undergoing reformation which is SHIP (Safe Home Income Plans).

 

Changing attitudes & beliefs

These property equity release plans are designed to be secured on properties which have had most or the entire existing mortgage paid off. Equity release is essentially a re-mortgage, but with special consideration taken into what stage of life the homeowner is in. The statistics show that retirees are now living longer and have a renewed vigour & enthusiasm that has rekindled that sense of adventure from years gone by.

 

Why? The whole idea and acceptance that we are only here once; so ‘let’s make the most of it’ attitude.

 

Home equity release schemes are a great way of topping-up a retirement pension, as they can be arranged to either provide an additional amount of “income”, by slowly releasing the equity from a home in a controlled manner. Otherwise, they can provide a lump sum of cash which can go top-up an emergency fund, or to provide capital that can be used for a lifestyle purposes such as home improvements, a new car or holidays.

 

New lending approach from equity release companies

The benefits of today’s range of home equity release schemes are that they provide excellent value for money, given that equity release interest rates are the most competitive ever. Interest rates are now available from the likes of AVIVA starting from just 5.57% dependent upon age, property value & equity release scheme taken.

 

This new approach to equity release lending takes more account of how potentially profitable a plan is to them. We have already seen this to some degree with LV= who operate a tiered interest rate structure dependent upon age. Basically, the older the youngest applicant is, the higher the interest rate becomes. The principle behind this is, the younger one is, the longer their life expectancy should be. Consequently, the longer the equity release plan runs for the greater the final balance which results in a greater profit margin for the lender.

 

Makes business sense, or does this? Only time will tell, however from the initial feedback and rates being made available from the Aviva trial program indicates that considerable reductions in interest rates can be made, even with the offer of the free valuation and upto £1000 cashback!

 

What effect does this have on the children?

For those looking for the lowest interest rate on a home equity release mortgage a lower interest rate will save £1000’s over the long term. This will reduce the financial burdening of compound interest from day-to-day with the mortgage arranged so that the additional cost of interest charged is taken from the equity in the home. This means that the burden is shifted to the inheritance estate, or to when the home is sold when the policy holders are in care or downgrade their home. In each of these cases, it is likely that the market will be more buoyant and the home will have more value anyway as hopefully property values will have risen over the duration of the home equity loan period.

 

With savings taking such a beating due to low interest rates and pensions being punished so hard by this crisis, many retired people are struggling with their finances. Sometimes products like home equity release schemes can help and provide some extra comfort and peace of mind. They can top-up the incomes provided through annuities or drawdown pensions, and are usually available on terms which are more flexible and costs effective than those taken out in years gone by.

 

Equity release is an important decision. However, with the help & support of specialists in the field of lifetime mortgage and home reversions plans such as Equity Release Supermarket we can find the best equity release deal for you.

 

No matter your location in the UK or Northern Ireland we have equity release schemes covering these locations. So either pick up the phone & call 0800 678 5159 & speak to one of the equity release team or click here to find your local equity release adviser.

 

These are lifetime mortgages and home reversion plans. To understand their features and risks, ask for a personalised illustration.

Stonehaven Equity Release Schemes – Now Available In Scotland

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 which 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.

 

Why Now Might Prove to Be a Good Time to Take Out an Equity Release Plan: Given the Competitiveness of the Market

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.

 

Reasons to Consider an Interest Only Lifetime Mortgage

Wednesday, December 21st, 2011

What is an interest only lifetime mortgage? Well there are many reasons to look into interest only lifetime mortgages in order to meet the financial challenges in our current economic climate.

An interest only mortgage should always be considered before a roll-up equity release or home reversion plan. If you are looking towards protecting your inheritance & wish to pass the full estate to your beneficiaries then an only interest mortgage will do as it says on the tin. By borrowing a fixed amount & repayment of just the interest element will mean that the balance will remain exactly the same.

 

Example of an Interest Only Lifetime Mortgage

The interest only lifetime mortgage is an especially useful product for those over 55, as there are specialist equity release style interest only lifetime mortgages available. Often these plans provide historically attractive interest rates and features that assist those in retirement to plan their financial futures. Consider Stonehaven equity release, who offer several forms of their Interest Select Plan which is effectively a non-verification lifetime mortgage. With this plan you can effectively borrow a percentage of the value of the property & you can chose how much of the interest to pay – starting from £25pm upto the full interest payment.

 

What Purposes can it be used for?

Many people who are looking to consolidate debts will find the Stonehaven Interest Select style of interest only lifetime mortgage to be an attractive option for getting all debts under one single interest only payment. This kind of debt consolidation means that the actual total amount borrowed and paid monthly is thereby reduced & hopefully under control. Additionally, the lower interest payments are likely to be less than payments made over many other debts due to the considerably lower interest rates charged by credit card companies & alike.

 

Overall, this makes the payment of debts easier, as Stonehaven will automatically take payment by direct debit, and easy to plan as the total amount is taken monthly. The fixed interest rate option on an interest only mortgage is a very attractive offer. This means that regardless of the Bank of England manipulating conventional interest rates, the Stonehaven interest select plan will always remain exactly the same. For this reason and these features, is why the Stonehaven Interest Select and Stonehaven Interest Select lite (has lowest fixed interest rate at 6.13%) are so popular. More details about these plans can be found on the Equity Release Supermarket website.

 

Are Alternative Equity release Schemes Available?

There are alternative options available for those looking for equity release schemes, including other options for interest only lifetime mortgages. These could depend upon location such as Scotland & certain counties within England where we have access to specialist lenders.  It is therefore important to discuss what is right for you with an accredited independent equity release advisor who has access to the whole of the equity release & interest only mortgage market.

 

Another place to research equity release schemes and interest only lifetime mortgages is the Safe Home Income Plans (SHIP) website, which acts as a consumer safety watchdog for elderly financial products. The Stonehaven equity release products are all registered with SHIP, so these products also come with this important peace of mind. They also have the protection of being regulated by the Financial Services Authority (FSA) thereby coming under the auspices of their compensation scheme.

 

There are many reasons for those over 55 years of age to consider equity release. Many often wonder what is an interest only mortgage? They also wonder what the best options are for their specific needs and situation. While a financial advisor is best placed to help, researching SHIP qualified products like the Stonehaven Interest Select interest only lifetime mortgages often help get started.

The Equity Release Supermarket website is also a useful place to start learning about the ‘ins and outs’ of equity release. There is a lot to learn, so be sure to speak to one of our specialist financial advisers as early as possible and often to be clear about the direction your enquiry is heading.

 

Call our Freephone number 0800 678 5159 for further details on Interest Only Lifetime Mortgage Plans.

Alternatively, follow this link to request a Stonehaven equity release quote.

 

Do Stonehaven Offer A Real Interest Only Lifetime Mortgage Solution Following the Demise of the Halifax Retirement Home Plan?

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?

 

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

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

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

 

So why was the Halifax Retirement Home Plan Withdrawn?

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

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

 

Reasons for the Halifax Retirement Home Plan’s Popularity

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

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

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

 

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

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

 

Regulation & the FSA Effect

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

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

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

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

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

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

 

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

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

 

So why are the over 60’s being penalised?

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

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

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

So for now we have to accept the level of caution in the mortgage market. However, moving forward consultation & consideration should be given to this corner of the mortgage market as it can have additional benefits to a fragile economy.

 

The reason being is that pensioners releasing equity in retirement do so mainly for lifestyle reasons:-

  • Home improvements
  • Deposits for the children
  • Holidays
  • New car/caravan

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

 

What Interest Only Pensioner Mortgages Are Currently Available?

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

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

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

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

Stonehaven are members of SHIP & regulated by the FSA.

 

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

 

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

 

Equity Release Calculators – How They Can Help You

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.

 

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.

 

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. However, currently there isn’t an operational Halifax Mortgage calculator available.

 

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.

 

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

 

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 you will have the knowledge as to whether equity release will be of assistance.

 

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.

 

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.

 

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.

 

On Why Finding A Good Equity Release Consultant Is A Must

Wednesday, June 22nd, 2011

The amount of equity you own is the term used to describe the value of a home less any mortgage or secured pending on it. Equity release allows you to free up this money tied up within your home.

 

The equity release process will allow you to receive a tax free, lump sum of capital allowing you to spend it in whatever way that you choose.

 

An obvious disadvantage is that you will not be able to hand down all of your property to your offspring. Nevertheless, you do get to live out the remainder of your life in your home, rent free or till you move into elderly care.

 

If you are considering an equity release scheme, the best way to get started would be to approach an expert. Some organisations which provide equity release schemes also provide a free consultation, so remember to take advantage of their services. Some research of the advisor would be of benefit as they must be regulated by the FSA (Financial Services Authority) & have an individual registration number with them. The equity release adviser should therefore be found on the FSA website register.

 

Ensure they are independent, which means they are free to deal with ANY equity release provider in the market. So ask. Some companies purport to be whole of market, however upon closer analysis they only deal with a handful of companies. You may therefore be missing out on a beneficial feature of an equity release scheme that they do not have available. This could save you £1000’s in the long run & could prove costly if the wrong equity release plan was chosen.

 

Your advisor will let you in on all the vital details regarding the procedure. This will be after the equity release adviser has collated all the necessary facts regarding one’s current situation. Guarded with this information, & any soft facts provided such as ‘how important is that you leave part or all of your property to your beneficiaries?’  will be asked. Also income & whether you are in receipt of means tested benefits is important as this will reflect on which equity release schemes are advised upon. The equity release consultant can then document & record this stage of the lifetime mortgage process.
Once an accurate financial picture has been ascertained & observed the clients objectives, the equity release adviser can then discuss the mortgage options available. These would include an explanation of the various schemes available to suit. Included in this would be roll-up equity release schemes, home reversion plans & interest only lifetime mortgages such as the Halifax Retirement Home Plan or the Stonehaven Interest Select.

 

You do not have to give them an instant decision; after all, going for an equity release scheme is a big decision and something which should not be rushed into.

Upon presentation of the equity release advisers recommendations a Key Facts Illustration must be offered to you. This would include a summary of the scheme in principle, costs & charges, future balance & the commission payable by the lifetime mortgage providers. This is quite a comprehensive overview of the scheme & covers the finer details, as well as the main features, such as the no negative equity guarantee & early repayment charges etc.

 

Once you have made your decision, all you have to do is simply call your advisor and give them the go ahead. They will have all your paperwork taken care of, contact your solicitor and keep you updated about everything, right to the time that you get your money released.

 

A professional & courteous adviser will confirm the funds have been released & offer any after care service in the future; for example when additional funds are required such as on a drawdown equity release scheme.

 

As a company Equity Release Supermarket keep contact with its clients to advise on new products & interest rates in the future as it is important to keep abreast of the market as & when more competitive products become available.

 

Independent & award winning equity release specialist Equity Release Supermarket offer all the above benefits & quality of service that the testimonials at the bottom of the home page illustrate.

 

To discuss your options in the release of equity from your property call freephone 0800 678 5159 today or alternatively complete our contact form & one of our advisers will be in touch

 

 
Ask us a question

captcha