Posts Tagged ‘home reversion schemes’
Tuesday, August 31st, 2010
Some people will be unsure how to begin the equity release procedure. Anxiety with proceeding with this form of borrowing could result in never receiving benefits from this excellent form of lifetime mortgage. Similarly, they also fail to consider certain important points which form an integral part of equity release schemes.
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Equity release is basically the method of utilising the current value of your property to get a steady supply of cash. The cash may be received in a lump sum or in instalments.
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Age is usually the major decisive factor while deciding the percentage value of the home which can be released. For instance, an older person is allowed to release a higher percent value of their home. However, a younger person will not be allowed to release the same value.
The following are some important points to mull over when opting for equity release:-
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Age – As mentioned, age plays an important role while determining the percentage value of the home which can be released. Keep in mind that there is no maximum age limit as such when it comes to determining the percentage. For instance at age 55 which is the youngest possible age for equity release, themaximum release is currently 19%. As the age increases, so does the percentage.
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As a consequence, the following are examples of maximum releases possible relating to a roll-up equity release scheme: -
Age 55 - 19%
Age 65 - 29%
Age 75 - 40%
Age 85 - 48%
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Regulation - Lifetime mortgages and equity release are regulated and monitored by the Financial Services Authority. This came into effect after adverse publicity with regards to older equity release schemes which were the fore runners to todays plans. Therefore, in 2004 the lifetime mortgage market became regulated under the Financial Services Authority (FSA). Home reversions followed later & became regulated in 2007.
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Choosing an equity release plan- If you are choosing an equity release plan, keep in mind that it should have a no negative equity guarantee. This is a requirement of SHIP (Safe Home Income Plans) that any equity release scheme currently a member must have this feature present within the plan. The no negative equity guarantee provides security that on eventual repayment, be it on death or long term care, the value of the debt can never exceed the property value.The worst case scenario would be that no equity will remain for the children, however at the same time no debt can be incurred.
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Consideration of the above mentioned factors will help you immensely when choosing an equity release plan.
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To discuss any of the features described above, or to ascertain how much you can borrow please call one of our equity release specialists on 0800 783 9652.
Altenatively, you can email mark@equityreleasesupermarket.co.uk
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Tags: Add new tag, equity release, equity release schemes, home reversion, home reversion schemes, lifetime mortgage schemes, lifetime mortgages, Roll up lifetime mortgage, SHIP
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Monday, August 23rd, 2010
If you are 55 plus and own your own home that is your main residence, then you are eligible to choose from any of the current equity release schemes.
Today, many retired people are opting for equity release schemes because they offer a lump sum of money against the value of the property. Home reversion plan and lifetime mortgages are two different types of equity release schemes.
By opting for home reversion plans, you can sell all or just a part of your property in exchange for money. This tax-free cash will help you to live the rest of your life in financial security. There is also a lifetime mortgage scheme which allows homeowners to sell their whole property for money.
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Lifetime mortgages are further divided into various types such as:
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Roll-up plan – Under this scheme, you can borrow an amount of money from the mortgage lender against your home. You do not have to make any payments to the lender in order to repay the equity release mortgage. Instead the interest charged is added to your last years balance & compounded annually thereafter. Therefore the balance will increase year by year until the equity release planholder either moves into care or dies. At this point, the property is usually sold & the equity release company is repaid.
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Home income plan – By opting for this scheme, you will receive a regular monthly income against your home. In this scenario, a percentage of the value of the property is sold in exchange for a tax free lump sum. These funds are used to purchase an annuity which is how the scheme then provides the monthly income. The lender or financial institution will be paid by selling the home after you die.
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Interest-only mortgage – Unlike the roll-up plan, this type of equity release scheme allows you to pay off the interest charged monthly. Therefore the balance of the mortgage will remain exactly the same for the duration of the plan term. As a consequence the beneficiaries will know the exact amount that will be deducted from their inheritance. The actual loan is again repaid by selling the property.
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Out of the above mentioned lifetime mortgage schemes; you can choose the one which suits your financial needs by contacting Equity Release Supermarket on 0800 783 9652 or email mark@equityreleasesupermarket.co.uk
Tags: equity release, equity release schemes, Home Income Plans, home reversion, home reversion schemes, interest only mortgage, roll-up scheme
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Sunday, August 22nd, 2010
Equity release is a concept which is often misunderstood. It is a common myth that you lose your property if you opt for this scheme. This is not the case.
Equity release is the equity tied up in your property that you can now release. This facility lets you still enjoy the ownership rights by mortgaging your assets. equity release schemes give you all the ownership rights of your property till you die.
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What are the different types of equity?
There are two types of equity release scheme:
Lifetime mortgage: A lifetime mortgage scheme lets you retain complete ownership of your assets. An individual who takes the loan has no responsible any monthly payments. The loan is eventually repaid by the legal heirs after the plan holder moves into care or eventually dies. Hence, the reason why this is known as a lifetime mortgage scheme.
Home Reversion scheme: You need to sell part or all of your property to the reversion provider for this scheme to work.
There are three reasons how the size of the release can be affected: -
- the greater the percentage of the property sold, the greater the size of the release
- the older the equity release applicant, the higher the amount that can be raised
- if their is an element of ill-health, then the home reversion provider can release a larger than normal cash lump sum
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Types of payment
There are two types of method of receipt of the cash payment you get in an equity release scheme; a lump sum and a monthly payment. You can opt for one of these payments dependent on your needs.
A lump sum amount can be used for capital expenditures, while monthly payments can be chosen by those who need a regular income.
The most important benefit of equity release is that it gives you tax-free money. The only thing you need to remember is that you can mortgage the property which you own.
The minimum age to be eligible for these schemes is 55 years for a lifetime mortgage and 65 for the reversion scheme.
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To obtain advice on which is the right equity release scheme for you please ring the Equity Release Supermarket team on 0800 783 9652 or email mark@equityreleasesupermarket.co.uk
Tags: equity release, equity release schemes, home reversion, home reversion schemes, impaired life, lifetime mortgage schemes, lifetime mortgages
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Wednesday, July 28th, 2010
If you want to secure your retirement life financially then equity release should be a major consideration.
The important feature of today’s equity release schemes is that they allow you to unlock money against the value of your property without you having to move.
By opting for an equity release plan, you can get a tax free cash lump sum or you can select the regular income option. Your independent equity release adviser will guide you as to the most suitable equity release plan based on your individual requirements.
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Today, many homeowners who are above 55 years of age prefer to use an equity release scheme to boost their income. To qualify for equity release, you have to own a home with a value of more than £70,000. You should have little or no mortgage in order to qualify for these equity release schemes.
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The many features of equity release schemes
Equity release schemes are basically divided into two main types such as:
• Lifetime mortgages
• Home reversion plans
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Both the above mentioned equity release schemes allow you to get cash against the value of your home or property without you having to leave it. During the life of the equity release scheme there are no monthly payments to be made. Instead, the interest being charged is added to balance of the equity release on a yearly basis. It will therefore compound interest over the years at a fixed rate which remains the same for life.
The repayment is eventually made by selling your home when you die or move to long term care. Equity release schemes are perfect for homeowners who do not have any family as there is no as much reliance on how much equity remains at the end of the day.
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Apart from above mentioned benefits, equity release schemes also offer tax-free cash which can be used to spend as you wish. There are no restrictions on how you decide to spend the money.
This means that you can buy a car, a second home, new suite & many other home improvements. One of the most popular reasons for equity release currently is to consolidate outstanding debts which has the effect of reducing monthly outgoings & thereby increasing disposable income in retirement. Click here so see examples of how Equity Release Supermarket clients have spent their equity release funds.
However advice should always be obtained in order to establish the best way of fulfilling your requirements. There are many ways of releasing equity from your property & this is where independent financial advice from an Equity Release Supermarket adviser can save you thousands of pounds by having the choice from the full range equity release schemes.
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Call the Equity Release Supermarket team today on 0800 783 9652 or visit the market leading equity release website at http://www.equityreleasesupermarket.co.uk
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Tags: equity release, equity release schemes, Home Income Plans, Home Income Schemes, home reversion, home reversion schemes, Independent equity release advice
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Thursday, July 22nd, 2010
Are you over 50 and retired? Are you looking for a way to generate income after your retirement? If your answer is yes, opting for an equity release plan can be a good solution. Equity release advice from a reliable source can be helpful, especially for those homeowners who seek to access the value that have locked into their home.
Life after retirement should be enjoyable. And equity release is an option that individuals can use for different purposes including:
• Holidays
• Purchasing a car
• Home improvements
If you are looking at an equity release scheme, seeking the right professional advice is important. Taking professional help can help you to get the best deal.
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Why seek professional advice?
Equity realise schemes are of two different types, namely the home reversion plan and the lifetime mortgage. Selecting an appropriate arrangement to suit your needs is very important. With the right professional equity release advice, you will have a deeper understanding about the obligations and commitments you agree to.
As the value of your assets will be reduced with equity release, there will be a decrease in the inheritance your family will get. Moreover, as there are certain criterions you need to fulfil as part of the equity release scheme, professionals will help you determine whether you are eligible for the scheme or not.
If you are serious about equity release and want to get the best deal, make sure that you seek professional advice.
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With over 30 years combined equity release experience, Equity Release Supermarket advisers have the knowledge & experience to provide quality, independent advice.
For further advice call 0800 783 9652 today.
Tags: Add new tag, equity release, equity release schemes, Financial adviser, home reversion, home reversion schemes, lifetime mortgages, qualified adviser
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Saturday, July 17th, 2010
Equity release is a method of acquiring a stable income source from the capital value of your home while you still live in it. This type of loan is usually paid to the provider after the homeowner passes away or moves into long term care. Equity release is a perfect option for people above 55 years of age, who have locked their assets into their property and need to use those funds during their retirement.
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Some features and facets of equity release
Equity release can be of two different types - lifetime mortgage and home reversion.
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Lifetime mortgages
This type of loan is generally used to create a retirement fund for the borrower to spend on enhancing retirement lifestyle. The money is usually paid as a lump sum amount.
Interest is added to the capital initially borrowed during the loan term. This amount is paid when the owner moves to a retirement home or sold off after the borrower passes away.
The debtor retains 100% ownership of the home together with other responsibilities and costs of maintaining the property. However, the only negative aspect of a lifetime mortgage is that the accumulated capital and interest compounds yearly, thus potentially reducing the inheritance that will be passed onto the beneficiaries. Nevertheless, with property values hopefully rising over the years, this roll-up of interest can offset to some degree the interest accumulation on equity release schemes.
The final outcome of the equity release scheme is that the lender will require eventual repayment of the scheme from the sale proceeds. However, after this event the executor of the estate will have between 6-12 months in which to finalise this repayment. This should provide enough time for a adequate sale price to be achieved for the estate & hopefully provide a surplus capital amount over & above the equity release balance.
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Home reversion plans
With this option, the homeowner sells the whole or a fraction of the property to a reversion company. The reversion company offers a tax free capital sum or a regular income to the borrower,. Moreover, borrowers can continue to stay in the home till their death even if they do not own it any more. They are provided with a lifetime tenancy agreement which allows them to remain in situ until they either die or move into long term care.
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To discuss the advantages & disadvantages of lifetime mortgage or home reversion schemes please contact Mark on 0800 783 9652 or email mark@equityreleasesupermarket.co.uk.
Alternatively, visit our website at http://www.equityreleasesupermarket.co.uk
Tags: equity release, equity release schemes, home reversion, home reversion schemes, lifetime mortgage schemes, lifetime mortgages
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Monday, July 5th, 2010
Equity release is a form of mortgage, which allows homeowners who are older than 55 years to release some equity from their property. This scheme is perfect for people who have no or little mortgage and want some more money to improve their lifestyle. If you own a property and you are over the required age limit then equity release is an ideal option to raise specific sums of money.
One of the best features about equity release schemes is that they offer tax free money which can be used for various purposes.
First of all, any mortgage that current exists must be repaid from either the funds raised via the equity release, or from any savings that exist. It is obviously essential therefore that you seek independent financial advice to ascertain whether enough can be released in order to complete this.
The Equity Release Supermarket calculator can assist in this respect by working out the maximum release possible.
Once this assessment has been done once, the tax free lump sum can then be used to spend on anything. Thus, you could opt to use the money to pay for any home improvements or repay debts such as credit cards or loans which can then be cleared immediately. There are many people who buy a second home or motor homes including caravans with this money.
You can even choose an option through which you will receive the money on a monthly basis, similar to a monthly wage or pension. This equity release scheme is beneficial for people who want to improve income in their retirement.
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If you have decided to opt for equity release then you should know more about two types of equity release schemes:
Lifetime mortgages – This type of scheme is known to be a secured loan which requires to be paid back only when the property is sold.
Home reversion plans – This scheme allows you to sell some or all of the property in exchange for a proportional amount of money. By opting for this type, the property does not 100% belong to you, but you can live in it as long as you require by acquiring a lifetime tenancy in the property.
Out of the above mentioned types, you can choose the scheme which best suits your financial requirements.
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Always seek advice from an independent equity release adviser - call 0800 783 9652.
Tags: Add new tag, equity release, Equity release calculator, equity release schemes, home reversion, home reversion schemes
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Saturday, July 3rd, 2010
Equity release schemes are more commonly & individually known as lifetime mortgages, home reversion or home income schemes. These schemes are the perfect solution to purchase a new car, get funds for a new home improvement project, to pay for a holiday or to simply make your everyday life more comfortable.
Equity release schemes enable you to release money against the overall value of your home. The debt is then repaid from the sale of your property after your death, moving into long term care or earlier sale of the property.
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How do equity release schemes work?
While there are different schemes that offer a lump sum or/and regular income, they work on two principle’s.
The lifetime mortgage schemes provide you a with a capital amount from the value of your home with the amount to be repaid being determined by the interest rate charged & how long the interest roll’s up over.
Home reversion schemes still provide you with a capital amount, however the reversion company takes a percentage of the value of the property in return. Therefore, there is no interest element. Once the property is finally sold on death or long term care, the original percentage sold is retained by the reversion company & the beneficiaries receive the remainder. e.g. if 50% of the property was initially transferred to the home reversion provider, then on the eventual sale of the property there would still be 50% of this value to pass to the beneficiaries.
The minimum age for lifetime mortgages is only 55, whilst the minimum age for a home reversion scheme is 65. The property should must be owned & be in a reasonable condition. If a mortgage exists before inception, then this needs to be repaid from the equity release proceeds or any savings held. The equity release scheme, whether lifetime mortgage or home reversion scheme can be the only secured loan on the property.
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The attractive features of an equity release plan
Equity release plans can offer you a regular income, a lump sum amount or both with the money released being free of income tax. However, if the amount is invested & you are a taxpayer, you may need to pay tax on any interest gained.
In order to unlock equity, there is no need to sell or move your home. Using an equity release scheme, you get assurance that you can continue to reside in your home until you die.
If you do not have any family or children to leave your inheritance to, then an equity release scheme can be an extremely attractive concept.
With the above advantages that equity release schemes offer, it could be the perfect way to unlock your money & enoy a comfortable retirement.
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If yu have any questions on the topics discussed above then please contact the Equity Release Team on 0800 783 9652.
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Tags: equity release, equity release schemes, home reversion, home reversion schemes, lifetime mortgages, Roll up lifetime mortgage
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Friday, July 2nd, 2010
We all like to save money, but in today’s economic climate sometimes this can be difficult.
However, saving is actually a source of investment that proves to be helpful in times of financial trouble. And, the need to save and have an investment fund available is more important when people reach old age.
Equity release schemes are a good solution for older people to overcome their income problems if they do not have adequate savings. Current equity release schemes provide different means in which to provide peace of mind to elderly people so that they no longer need to support themselves with only a small pension.
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Home reversion equity release schemes
With the help of a home reversion scheme, you can sell your home or a part of it to a reversion company in return for a monthly income or a lump sum or both. Technically, you will become a tenant of , although you continue to live in your home rent free. You receive a lifetime tenancy from the reversion company which gives the right to live in the property for the rest of your life.
When your property is eventually sold, generally after your death, the reversion company will get its payout. For instance, if you sell 50% of your property to a reversion company, they will get half the sale proceeds including any escalation in the property value. Just as importantly your beneficiaries will also receive a guaranteed 50% of the sale proceeds. If you sell 25% of your property, the reversion company will get 25% of the proceeds etc.
Additionally, the reversion company will also pay you a fraction of the present market value for the share of property it purchases from you. This is because you continue to live in the property till your death, and the reversion company will have to wait to get their return.
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This illustrates one of the main advantages of home reversion schemes in that you can guarantee the percentage of the final property value that can be passed on.
This differs from ‘roll-up’ equity release schemes whereby there is no guarantee as to how much the beneficiaries will receive, if anything. Nevertheless, a no negative equity guarantee is included in all SHIP (Safe Home Income Plans) equity release schemes to provide the guarantee that no more than the final property value can be owed to the lender.
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For further advice on Home Reversion schemes please ring 0800 783 9652
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Tags: equity release, equity release schemes, home reversion, home reversion schemes
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Friday, July 2nd, 2010
Good news is back in the equity release market as Home Reversion Plan provider Home & Capital increase on two fronts the amounts they will lend on their products.
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Recently there has been a reduction in the number of equity release schemes available in the market which has resulted in fewer options for those in need of cash for their retirement plans.
Therefore news that Home & Capital are reversing this trend with its home reversion plans is excellent news.
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The latest calculations now show that for a male aged 70 the home reversion rate has now increased from 43.25% to 47%. That’s a healthy increase on the amount Home & Capital will lend & represents a good increase on the equity release scheme funds clients will receive.
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Secondly, all Home & Capital reversion plans have had an increased the ceiling on the maximum amount customers can raise.
This has now risen by over 41% from its previous maximum of £85,000 upto £120,000.
The maximum percentage of the property you can sell with Home & Capital home reversion plans is 95%.
Existing offers on the Home & Capital reversion plans will continue. This includes no arrangement fees & a special offer of a free valuation on all applications made before 31st July 2010.
The minimum age for the home reversion plans is 65+.
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These increases come at a time when retired people who wish to consider equity release are being hit on most sides.
Lower interest rates on their savings coupled with the impending increase in VAT will all affect the elderly population greatly over the next 12 months & beyond.
Therefore, there is some light at the end of the tunnel for the elderly who need financial assistance & a supplement to their capital or to boost income.
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With property values showing a steady, yet unspectacular increase since the start of 2010 many people in retirement can be sitting on a large amount of equity that can be utilised.
People are increasingly beginning to embrace the idea that their property is a legitimate asset that can be used to release equity - either via downsizing or via equity release schemes.
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To discuss your equity release requirements further please contact Equity Release Supermarket on 0800 783 9652 or email - mark@equityreleasesupermarket.co.uk
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Tags: Add new tag, equity release, equity release schemes, free valuation, Home & Capital, home reversion, home reversion schemes, lifetime mortgages, no application fee
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