Posts Tagged ‘home reversion’
Wednesday, December 8th, 2010
Today, equity release schemes are preferred by many people because they help unlock money against the value of their homes. If you are 55 years of age or older and facing financial constraints then you should consider equity release schemes. They are specifically designed for older people who own their own home and seek to live a better life.
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How do equity release schemes work?
With the help of these schemes, you can obtain 15% to 50% of the value of your property. To qualify for equity release, you must also have no or very little outstanding debts. If you have any secured debts then they must be fully repaid, either before or actually on completion. In exchange for a value of your property, the lenders will pay you a lump sum amount of money or a monthly payment.
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Two different types of equity release scheme
To fulfill different needs, two different types of equity release schemes have been introduced. These include lifetime mortgages and home reversion plans.
If you choose a lifetime mortgage, you can receive a lump sum amount of cash against your property. The best thing about this scheme is that the repayment is made when the homeowner dies or moves to a care home. Today, different types of lifetime mortgages have been introduced by different financial institutions.
Home reversion plans allow you to sell a part or all of your property in exchange for a cash payment. You will receive a lifetime tenancy agreement & have no rent to pay for the rest of your life.
All equity release schemes we advise on are regulated by the FSA (Financial Services Authority) & are members of SHIP (Safe Home Income Plans).
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To establish which of the two lifetime mortgage schemes are suitable for your requirements, contact the Equity Release Supermarket team on 0800 783 9652.
Tags: equity release, equity release schemes, home reversion, home reversion schemes, lifetime mortgage schemes, lifetime mortgages
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Wednesday, December 1st, 2010
On a daily basis we get serious financial queries from people looking to alleviate their money woes in retirement. This could be due to a number of lifestyle issues,; perhaps due to a lack of pension provision over the years, divorce, business failure, the list is endless.
However, to all these scenarios equity release can potentially be a saviour in one way or another. This is why it is so important that advice from a qualified equity release adviser is sourced.
From an equity release advisers point of view it gives us most pleasure to see how life changing equity release schemes can be to clients & the benefits they bring.
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Equity release is specifically designed for homeowners who want to release capital against their homes. If you have a situation that requires a capital lump sum to resolve the cash flow problem, then equity release schemes may be the solution.
However, which is the right equity release depends upon your requirements & attitude towards your beneficiaries.
In general, all equity release schemes will provide some form of tax free lump sum, but it is the method of its withdrawal that will determine the most appropriate equity release scheme that is correct for you.
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Criteria to qualify for equity release
If you want to opt for equity release then the youngest age of the homeowners must be over 55 years of age. In addition to this, your main residence must be worth a minimum of £60,000 & if any secured debts are outstanding on the property, then they must be repaid at completion of the new equity release plan. Therefore, unless there are savings to cover the repayment of the mortgage, then sufficient funds need to be raised on the new equity release plan to redeem the existing mortgage.
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How much equity can you release?
The cash lump sum received depends on various factors. These include your age, the value and your health situation. The scheme you choose can also affect the amount of receivable money. The older the age of the applicant, the greater the potential equity release available. The higher releases are often found on home reversion schemes which is where you sell a percentage of the property to the home reversion company.
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Is the money tax-free?
Yes, the lump sum money which you will receive against your home will be tax-free as it is classed as a withdrawal of capital. However, what happens to these monies next will determine whether these equity release funds remain tax free.
Once, the tax free lump sum is received from the solicitor & placed into the clients bank account, then if you are a basic rate taxpayer or higher, then you will be taxed at source on the interest generated. If you are a non-taxpayer then remember to have Inland Revenue form R85 completed, which will allow the bank or building society to pay interest with NO tax deducted.
The fact the equity release cash lump sum is tax free on receipt means that the funds should go further long term & allows you to spend the cash in various ways. The list for this is endless but most popular prove to be debt consildation, home improvements, buying a new car or go on a holiday or pay off outstanding debts.
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Will you own the property?
If you have opted for a lifetime mortgage scheme, then the property will still be 100% yours, albeit the equity release company will have placed a legal charge on the property & lodged it with the land registry. This protects the provider in that when the property is eventually sold, they will have first bite of the cherry & recieve the original cpaital borrowed, plus compounded interest to that date.
In the case of home reversion plans, the whole or a part of your property will be owned by the lender. Therefore, dependent on how much of an equity release cash lump sum is required, will determine the percentage of the property that needs to be sold. This could be as little as 10% or even as much as 100% of the total property value. Obviously, if 100% of the property is sold then you will forfeit certain rights. These would include there being NO inheritance to pass onto any potential heirs, no equity to negotiate on if you want to upgrade to another property & you will require the home reversion company to approve any building work or changes to the property you require.
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Please think carefully before entering into any long term equity release mortgage arrangement. The equity release market is highly regulated by the financial services authority (FSA) with advise not only coming from an mortgage specialist such as Equity Release Supemarket, but also from a legal representative which will ultimately by your solicitor.
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To discuss your equity release options further & to request a free initial NO obligation financial planning service meeting, then contact the Supermarket team on 0800 783 9652 or email admin@equityreleasesupermarket.co.uk
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Tags: equity release, Equity Release Adviser, equity release schemes, home reversion, home reversion schemes, impaired life, lifetime mortgage schemes, lifetime mortgages, Roll up lifetime mortgage, SHIP
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Tuesday, November 30th, 2010
There are many retired people who cannot find th quality of life they yearn for on the limited savings and small pensions they have. If you are suffering from financial difficulties then equity release can be the perfect solution for you. Equity release allows you to unlock money against the value of your home.
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How does equity release work?
To qualify for equity release, you must be above 55 years old and own a home which is worth more than £60,000. Once you have opted for equity release, you will receive a lump sum amount of money or monthly income from the lender.
If you have decided to go for equity release then you must know that there are two different equity release schemes in the market.
Lifetime mortgages – These schemes are preferred by many homeowners these days because they can be provided in different formats to suit people’s circumstances. The different types of lifetime mortgages range from lump sum equity release to the flexible drawdown equity release schemes. The lump sum plans do as the name says on the tin, in that they provide a single, one-off lump sum which is fine if no further cash releases are required.
However, this can be difficult to predict & when interest rates for the lump sum & drawdown are the same then invariably the drawdown plans are the most popular equity release schemes available.
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Home reversion plans – These equity release schemes allow you to sell the whole or only a percentage of your home to the home reversion lender. This means that you have the option to also keep some part of the property for your beneficiaries. These are the only type of equity release schemes that can guarantee an inheritance for your beneficiaries.
Both the above mentioned equity release schemes are regulated by SHIP (Safe Home Income Plans) and the FSA (Financial Service Authority). These organisations ensure that all the applicants get the protection that equity release UK schemes should receive in getting the appropriate deal for your circumstances.
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To ascertain which or how either of the aforementioned equity release schemes can benefit you, please contact Mark Gregory on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk
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Tags: Add new tag, drawdown, drawdown equity release, equity release, equity release schemes, home reversion, home reversion schemes, inheritance protection, lifetime mortgage schemes, lifetime mortgages, SHIP
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Monday, November 29th, 2010
Equity release is a scheme which is designed to assist retired homeowners release some money against the value of their homes. If you find it difficult to live with small pension, possibly even benefits and little savings then equity release is an ideal option for you. Once you have opted for equity release then the eventual repayment will be done after your death or when you move to long term care. This is the time at which beneficiaries will be in receipt of their inheritance.
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Today, two different types of equity release schemes have been introduced to the market. These include home reversion plans and roll-up lifetime mortgages.
Many homeowners opt for lifetime mortgages because they offer great benefits.
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Two types of lifetime mortgages: -
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Roll-up lifetime mortgages – These equity release schemes are specially designed for those who want to release equity without paying monthly repayments. The amount that can be released is based on the age of the youngest applicant & the property value.
The younger the age, the lower the equity release sum that can be released. The reason for this is down to life expectancy, as lenders do not want to release too much at a younger age due to the roll-up of interest. With average life expectancy of a 60 year old now reaching beyond 80, lenders must err on the side of caution. The reason being that they do not want the equity release balance to reach beyond the property value in the future. This would cost them dearly as the no negative equity guarantee would then need to be invoked.
The mechanics of the roll-up lifetime mortgage means that the interest will be compounded monthly or annually & re paid eventually along with the original capital on the eventual sale of the property. Another important feature of these equity release schemes are that they allow you to maintain 100% ownership of the property.
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Interest only mortgages – This is one of the unique schemes which allow homeowners to release equity and repay monthly interest only. This means that the monthly repayment must be affordable on their retirement incomes. Such equity release schemes such as the Halifax Retirement Home Plan are few & far between as there are not many mortgage or equity release companies that offer finance to the over 65 age group.
Nevertheless, Equity Release Supermarket have unique access to such schemes & their team of friendly equity release advisers can identify which is the most suitable scheme dependent on your personal circumstances.
Interest only mortgages such as those offered by Halifax, will maintain the same balance from start to finish & therefore can guarantee how much of your estate will be required to settle with the lender at the end of the term. The balance will only be repaid after your death by selling the property. This will be carried out by the nominated executors who have been appointed in your Wills.
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If you have a question on whether a roll-up or interest only mortgagee is right for you contact the Equity Release team free on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk.
Tags: equity release, Equity Release Adviser, equity release schemes, Halifax Retirement Home Plan, home reversion, lifetime mortgage schemes, lifetime mortgages, No negative equity guarantee, Roll up lifetime mortgage
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Friday, November 19th, 2010
Lower pension incomes and high living costs have resulted in retired people looking for different financial solutions to make ends meet.
Due to these issues, more and more retired homeowners are turning to equity release schemes for an additional source of income. Equity release allow homeowners to use some of the cash tied up in their homes and get a tax free lump sum. They are also permitted to continue living there rent free & in the case of lifetime mortgages with 100% ownership to.
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Additionally there are other advantages gained from equity release schemes.
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- No need to move – One of the best things about equity release schemes is that homeowners do not have to worry about moving out of their homes when they sign up. In the case of roll-up lifetime mortgages the plan holder retains 100% ownership of the property & can remain there until the second person has died or moved into long term care. With regards to the second type of equity release – home reversion plans, the planholder retains the portion of the property they do not sell to the reversion company.
- Inheritance protected equity release products – Another benefit of these schemes is that homeowners can now choose whether or not they want to guarantee a certain percentage of their home. This means that they can still be sure there is some equity left for their beneficiaries. This can therefore form part of a gift of their inheritance.
- Supplementary income – More than 50% of retired homeowners have wealth that is tied up in their property. For this reason, many choose home equity release schemes to gain additional income. This retired people to meet daily expenses & assist with the day to day costs of living in today’s retired environment.
- In all cases, homeowners can move home during the term of their equity release schemes. However, they have to notify the equity release company. The reason for notification to the lender is that the equity release planholder has two choices. Firstly, they have the option of porting the equity release scheme over to their new property. The new property would have to meet the lenders property criteria, however it can be transferred with no early repayment penalty. Secondly, the scheme can be repaid in full, thuis removing any future equity release liability. You would therefore need to bear in mind any potnetial early repayment charges.
As equity release schemes can be rather complex, it is best to have a professional explain and oversee the process. All Equity Release Supermarket advisers are authorised by the FSA & the equity release schemes they advise on are all SHIP members.
The Equity Release team will provide independent financial advice & research from the whole of the equity release market.
To gain from their experience, please call freephone 0800 678 5159 or email mark@equityreleasesupermarket.co.uk
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Tags: equity release, Equity Release Adviser, equity release schemes, home reversion, home reversion schemes, inheritance protection, lifetime mortgage schemes, lifetime mortgages, Roll up lifetime mortgage
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Tuesday, November 9th, 2010
The current economic situation has forced everyone to look for different ways to raise money.
Equity release schemes are one option available to enjoy the fruits of retirement in a way many would never have envisaged.
Some people are still unaware of equity release schemes and their numerous benefits; here we aim to address those issues.
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Maintain standard of living
Immediately upon retirement, there is an evident drop in income. Unfortunately expenses do not.
You may think that saved money during your working life will be adequate for you to live comfortably. Rising inflation & lack of confidence in pension plans might make this difficult.
There are other options to consider & one of these maybe to downsizing to a smaller home. Other options available prior to considering equity release would be using any savings, asking relatives for financial assistance, claim any benefits due or if you have a good disposable income there is still the option of an interest only mortgage. The Halifax Retirement Home Plan can assist here.
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If you look into equity release schemes, you will notice that you do not have to sell your property. Therefore, you can remain at the property for the rest of your life.
Applying for equity release, enables you to obtain some of the cash value of your property and with a roll-up lifetime mortgage you still remain the owner. This way, you can maintain your standard of living and can avoid the hassle of moving into another house.
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Fulfil your needs
Additional cash can help retired individuals to fulfil basic needs as well as allowing them to pursue leisure activities. You may want to clear some debts, go on a long holiday, buy a new house or simply develop new hobbies. Equity release schemes can help you with these things.
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The age factor
Age is an important factor when buying an equity release scheme. Your age is directly related to the amount of cash you can get. The older you are, the more you can get. Lifetime mortgage schemes start at age 55 with a maximum release of 20% & run beyond age 90 releasing over 50%.
Home reversion schemes start at age 65 & again go past age 90 with the maximum release being the sale of 100% of your property to the home reversion provider.
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No limitations on spending
A good thing about equity release schemes is that you can spend the money the way you want to and there are no restrictions. We would only advocate initially taking an amount which you are likely to require in the first 12 months. The reason for this is that drawdown equity release schemes allow you to take the equity release cash in stages rather than all at once. This ensures that you pay less interest in the long run as you only pay interest on the actual amount you have withdrawn.
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Tax-free cash
The cash you receive from the scheme is free of income tax. However, if any funds are placed on deposit then you could pay tax on any interest gained.
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To find out whether equity release is suitable for you why not have a free initial consultation with one of our qualified equity release advisers. Call now on freephone 0800 678 5159.
Alternatively, email admin@equityreleasesupermarket.co.uk.
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Website – http:///www.equityreleasesupermarket.co.uk
Tags: equity release, Equity Release Adviser, equity release schemes, Halifax, Halifax Retirement Home Plan, home reversion, home reversion schemes, lifetime mortgages
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Thursday, October 28th, 2010
Equity release is a scheme meant for senior citizens. There are still some misrepresentations on these schemes due to lack of customer knowledge & product awareness.However, there are now informative equity release website’s such as Equity Release Supermarket who provide information & interest rates on the equity release schemes available.
Equity release schemes were introduced to secure individuals financially after retirement. Here are the answers to some of the most commonly asked questions:
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Who owns your property?
The key benefit of an equity release scheme is that you still own your property. You are still the decision maker for it.
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Is there any tax charged?
No tax is charged on the money you receive via an equity release scheme. The tax might be charged on the investment of this money. For instance, if you invest equity release money in a deposit account for further income or receipt of interest, then tax is charged.
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Criteria to qualify for equity release
Your property is surveyed for eligibility. The current minimum value for eligibility is £70,000. A property worth less than this amount cannot be mortgaged for equity release purposes. Coming to the eligibility of an individual, you need to be of at least 55 years of age to qualify for a lifetime mortgage scheme. A minimum age of 65 is required for a home reversion scheme.
An equity release scheme is one of the better financial tools meant for senior citizens. Every retired individual could potentially take advantage. You can opt for such a scheme even if you are financially secure. It can be used for investments or just to indulge in leisure activities. If you want to enjoy your retirement, consider equity release schemes & you can find the information you require by visiting the website of equity release supermarket.
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Tags: equity release, equity release schemes, Equity Release Supermarket, home reversion, home reversion schemes
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Sunday, October 17th, 2010
Making a plan for retirement can be tricky and challenging. There are a number of things to consider and certain questions regarding eligibility that always crop up.
Equity release schemes can be confusing and hence one should always opt for independent financial advice from companies like Equity Release Supermarket.
Occasionally there can be doubts about one’s eligibility that can often deter people from enquiring about equity release schemes. However, if one has any doubts the help is close at hand.
Mentioned below are some frequently questions Equity Release Supermarket get asked regarding equity release schemes.
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What are the eligibility criteria to qualify for equity release schemes?
Equity release is a scheme that was designed to benefit retired individuals. Therefore, the minimum age requirement for an individual to be able to opt for a the most popular option which is the lifetime mortgage scheme, is 55.
On the other hand, the second option which is the home reversion scheme, requires an individual to be at least 65 to qualify.
The property value upon which the equity release scheme is to be based upon should be valued over £70,000.
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Who takes ownership of your property?
Well that would depend on which type of equity release scheme you decide to opt for.
With a lifetime mortgage you always remain 100% the sole owner of your property. This type of equity release scheme gives you the value for your property without you losing ownership.
Home reversion schemes require you to sell a part or all of your property to gain the benefits.Therefore dependent upon how much of the property you sell to the reversion company, will determine how much ownership you actual retain. For instance if you sold 60% of the property value, then you will still retain 40% ownership for yourself & ultimately your beneficiaries.
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Do you have to pay for the loan?
Equity release schemes differ to residential mortgages as you have NO monthly payments to make. Your property is mortgaged with the equity release company & your loan is repaid by selling the property once you have passed away or moved into residential care.
The money has to be repaid by your beneficiaries or executors within 6 to 12 months, dependent upon the equity release scheme taken out. The interest is continually applied on the property until the loan is eventually repaid.
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If you feel that you need advice on which equity release scheme is suitable for your situation, please ring the freephone number 0800 783 9652 or email mark@equityreleasesupermarket.co.uk
Tags: equity release, Equity Release Adviser, equity release schemes, home reversion, home reversion schemes
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Saturday, October 16th, 2010
Equity release schemes are perfect for elderly people who are looking for ways to generate funds during their retirement.
The less common home reversion equity release schemes allows you to sell a part or your entire property to the reversion company. In return, you can get a guaranteed lifetime lease and tax-free money with no monthly repayments.
You can continue to reside in your property for as long as you want. Home reversion schemes also guarantee an inheritance to your beneficiaries. It is a scheme where you sell a percentage or all of your property to the reversion company while retaining the rights to live rent free in your home for the rest of your life. The equity received can either be paid out as a monthly income, lump sum or a combination of both.
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Some important benefits of home reversion schemes
As a home reversion equity release scheme is not actually a loan, there is no need to pay off any interest. Other equity release schemes such as lifetime mortgages not only charge you interest, but also reduce the inheritance for your beneficiaries which in extreme cases can erode ALL the equity in the property. This means that the interest amount can grow considerably over the years; in some cases it may exceed the value of your property.
This cannot happen with a home reversion scheme unless you select to sell 100% of the property in the first place.
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- Benefit from rise in property values
Unless you have sold your entire property, you can get your share as the property value increases.Therefore, if you have sold 50% of the property value, you will still retain any growth in your share of the remaining 50% of the property.
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- Release more equity compared to lifetime mortgages
With home reversion schemes, you can release more cash than lifetime mortgages allow you to. This can be advantageous should you have no children to leave your estate to. In addition home reversion schemes can have an impaired life facility built into the scheme. Therefore, if your health is poor or have an impaired life condition should as high blood pressure or you have suffered a heart attack, stroke or cancer then the home reversion company can give you a higher lump sum than otherwise have been. This would be due to the fact that they do not anticipate your life expectancy to be as high as the average & thus have actuarily decided they can afford to offer a greater lump sum.
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To request further information on home reversion schemes & a home reversion quote, please contact the Equity Release Supermarket team on 0800 783 9652.
Tags: home reversion, home reversion schemes, impaired life, No negative equity guarantee
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Friday, October 8th, 2010
Equity release schemes are the generic term encompassing all plans including lifetime mortgages & home reversion plans. They are potentially suitable for homeowners who preferably do not have a mortgage and have an income or lump sum requirement. If you are retired and want some money to enjoy your retirement then equity release is the best solution for you. By opting for equity release, you can unlock some amount of money against the value of your property without moving.
One of the best things about equity release is that it provides tax-free cash which can be used in various ways. This means that you can a buy a new car, go on holidays or pay of outstanding debts; more commonly credit cards & loans. There are different equity release schemes available in the market. One of the most preferred schemes is known as a home reversion plan.
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What is a home reversion plan?
These schemes do not start until age 65, however I feel they only really offer preferential terms once the age of 70 has been attained. Under these schemes, you can sell a part or the whole of your property in return for a cash lump sum of money. Once you have opted for this scheme then your home or a part of it will belong to the reversion company. One of the two main advantages of home reversion schemes is that home reversion schemes allow you to live in your home for the rest of your life. The reversion company will grant you a lifetime tenancy which means you can live there rent free for the rest of your life. Additionally, because you are selling a percentage of the value of the house, then you are also guaranteeing the final percentage of the property that will pass to your beneficiaries. This is NOT the case with a lifetime mortgage scheme.
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Advantages offered by home reversion plans
Once you receive money under a home reversion plan there is no need to worry about the repayments. This is because the lenders will get their share of the property value after your death & once the property is sold. Under this scheme, you can sell only a part of your property and keep the rest for your family or beneficiaries. This way, you can also benefit from the increasing value of the proportion of your part of the property. Home reversion schemes also tend to be cheaper in set up costs. The only fees with the major home reversion companies tend to be valuation & legal costs. Occasionally, Equity Release Supermarket do obtain free valuations as they do currently with Hodge Lifetime. Therefore, there would be no initial fees to pay on application & ALL costs would then be deducted on completion.
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To obtain your guide to Home Reversion schemes, please contact the Equity Release Supermarket team on 0800 783 9652 or click here to register
Tags: equity release, equity release schemes, Hodge Lifetime, home reversion, home reversion schemes, income plans, lifetime tenancy
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