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Posts Tagged ‘Independent Equity Release Advice’

The Importance of Annual Equity Release Reviews

Thursday, October 23rd, 2014

 

Feefo 100% Trust equity release reviews

 

It’s always a thrill to call my clients when their equity release application finally completes. That’s the time when they’ll receive their equity release proceeds and have the necessary funds to meet their objectives, such as home improvements, new car, helping their family or simply repaying debts. Although the application process has now completed, it’s actually the start of what should be a long relationship between the client and myself.

 

How Equity Release Supermarket can assist…

 

Here at Equity Release Supermarket we pride ourselves on the quality of our whole service proposition. Therefore, following completion of any application we always invite our customers to provide feedback as a measure of how their equity release has been handled. An equity release application can take on average between 6-8 weeks and during that time there are many steps we manage on behalf of our clients to make sure it’s transpires as smooth and as quickly as possible.

 

Our feedback request starts at the first stage of the equity release process which is where we provide the independent equity release advice governed by the regulation of the Financial Conduct Authority and following the Equity Release Council’s code of conduct. Thereafter, we ask for feedback regarding our administration team who process the cases and manage liaison between the client & solicitor & the lender. This aspect is of paramount importance to us as this governs the speed & efficiency of the whole application.

 

Feefo Equity Release Reviews

Feefo 100% Trusted Merchant

Our genuine online Feefo reviews illustrate our dedication to servicing equity release customers and its testament to the fact Equity Release Supermarket received the prestigious Feefo 100% Trusted Merchant Award for 2013. In fact during 2014 we are still on track for 100% positive Feefo reviews from our clients. By visiting the www.equityreleasesupermarket.co.uk website & clicking on the Feefo logo you can read how our customers view our excellent service & shows how our advisers will go that extra yard in order to provide their clients with our excellent customer service proposition.

 

As an example, one such review I received recently was as follows: –

‘I was really impressed how quickly Mark Rumney sorted things out for me and even though he was going on holiday this did not stop him. He made sure that everything was in place for me before he went, even well into the evening. So thank you Mark and I would definitely recommend your services.’

 

Continually Innovating – Equity Release

 

Today’s equity release schemes are very flexible, and clients circumstances can change, therefore I like to call clients annually to touch base, remind them of their options and review their situation. During the annual review I like to: –

 

  • Remind clients of the ability to make voluntary interest payments
  • Check whether any new products may be more suitable
  • Check whether interest rates have reduced and are still competitive
  • Check that interest only lifetime mortgage schemes are still affordable

 

Let’s look at each of these in turn…

 

Voluntary Interest Payments:

Both Aviva & Hodge Lifetime have equity release schemes which allow you to make voluntary interest payments of up to 10% of the original loan amount, once schemes have been in place for 12 months. This can dramatically reduce the outstanding balance at the end of the term, so it’s important we remind our clients of this and explain the mechanics of how they make ad-hoc payments to their lender.

 

New products:

New providers and products are often launched which may prove more suitable, although you need specialist advice when considering switching schemes. I offer a free initial consultation to complete a switch plan analysis in order to determine whether it is best advice to switch equity release plans.

 

For example, Pure Retirement launched a drawdown lifetime mortgage plan in 2014, which tends to offer the highest reserve on the market, with the possibility of receiving £1,100 in cashback that can cover all the remaining set up costs. This may therefore appeal to customers of older equity release schemes, as they can possibly switch to a lower rate at the same time as have a new cash reserve facility for future use.

 

We are also starting to come across former Halifax Retirement Home Plan mortgage customers where Halifax/Scottish Widows have declined further borrowings due to the new MMR rules on affordability. Fortunately, we have assisted some of these retirees with the new ‘interest servicing’ products from the likes of Stonehaven, More2life & the Hodge Retirement Mortgage. All these plans could be made available following a full equity release review, where if appropriate we can find a scheme that allows further funds to be made available.

 

Lower Interest Rates:

There are legacy equity release schemes out there from companies that formerly offered lifetime mortgages. These companies, however have since stopped offering new lifetime mortgage or home reversion plans. These equity release companies can include Norwich Union (now Aviva), Prudential, NatWest Equity Release, Portman etc.

 

Another legacy equity release scheme we commonly come across is Papilio UK Equity Release (formerly Northern Rock), where many existing customers could benefit from new equity release plans that offer lower interest rates. There are ex-Northern Rock customers that are being charged over 7% with Papilio UK. The Aviva Flexi Lifetime Mortgage Plan can currently offer equity release interest rates as low at 5.63% (5.83% representative APR). By switching equity release schemes I have saved my clients £1000’s in compound interest over the longer term. A good deal for them & their beneficiaries!

 

Check ongoing affordability

Some of my clients have taken out a lifetime interest only mortgage with either Stonehaven or More2Life. They’ve chosen to pay a fixed monthly payment for the duration of the plan. However, both plans offer the flexibility of being able to stop payments at any time and let the interest roll up. Similarly, with the Hodge Retirement Mortgage you’re also able to switch to rolled up interest when the younger borrower reaches aged 80. These are things that should always be discussed at annual reviews.

 

Overall, the annual review call that I make to clients can be really worthwhile. It’s always nice hearing how they’ve spent and enjoyed their money. It’s usually another common time when they ask me to call one of their friends and family who’d also benefit from my specialist advice, as their friends and family have seen how equity release has changed their lives.

 

Other areas where I receive many calls from existing clients, which impact the need for further equity release advice, can include:

 

  • Moving House
  • Death of one borrower
  • Additional borrowing

 

Looking at these in turn…

 

Moving House:

Most equity release schemes are flexible and allow you to move at any time. However, advice is needed with regards to value of you property you can move into. You’re also able to repay most schemes early but this could be subject to a variable, or fixed, early repayment charge.

 

Death of a borrower:

It’s obviously a distressing time when you lose a loved one. I often receive calls from the survivor asking what options they have or what happens next. I’m able to answer their queries and explain the simple process of informing the lender. The main query is whether the survivor can remain in the family home, where the answer is usually yes.

 

Additional Borrowing:

Most lifetime mortgage schemes are set up with an automatic drawdown facility where you can contact the lender when you need funds from an agreed reserve at outset. However, once this is exhausted, or if you’ve got an older scheme without a reserve facility, I often get telephone calls to check eligibility for additional borrowing. Here we can help & contact the lender to check whether further funds could be made available from the equity release company.

 

Summary

Remember, equity release schemes are designed as lifetime mortgage contracts and therefore you need to review your situation regularly. I pride myself in offering this unique bespoke service and many of my customers can vouch for the benefits.

 

Should you feel you may benefit from an equity release review of your existing plan, please contact me – Mark Rumney DipPFS CeMAP on: –

 

m: 07957 974826 or

e: markrumney@equityreleasesupermarket.co.uk

Why London Housing Statistics show Equity Release on the Agenda

Tuesday, May 20th, 2014

London Equity ReleaseAnytime housing values begin to increase, it is time to assess the home buying situation. Retirement has been a topic of some concern for those heading into their 60s. In fact, over 55s are starting to realise while they have worked hard, they may not have enough in their pension portfolio to live on. The reason is all down to living longer – longevity. The average life is no longer to 70, but closer to 90 for females. Even in London families are cash poor, but property rich. Take advantage of new housing statistics and use a UK equity release calculator to determine if there is an equity release solution for you. London equity release schemes are being called upon because of their ability to help those who need cash, but own large amounts of equity in their property.

 

Equity Release Defined

Equity releases most popular form is the lifetime mortgage. This mortgage comes in various guises and can either come with or without a method of monthly repayment until the property is sold, either because the homeowners move, pass away or end up in long term care. The mortgage can be taken out from the age of 55. These lifetime mortgages do collect interest based on a fixed APR that adds up each year until the mortgage is repaid.

 

The London Housing Market

London housing prices have increased by 17.7 per cent in the last year. New and pre-owned homes in London are continuing to increase rather quickly. While housing prices are increasing, mortgage interest rates have actually decreased in the last few years, however storm clouds are on the horizon with news that early 2015 could see an interest rate rise. The monthly cost even on equity release is lower than in previous years. Now with lifetime mortgages it is true you do not make a monthly repayment; however, it is important to use an equity release calculator to compare the cost of your lifetime product against a standard mortgage.

 

By comparing the two you can determine if the low monthly cost stacks up against the equity lifetime release. Standard mortgages in London offer a loan to value of 75 per cent, meaning the other 25 per cent has to be a down payment for the purchase of the property. Even the LTV has been increasing over the last few years and markedly in the last few months. What this means for lifetime equity release is a higher percentage of lump sum tax free cash available for homeowners.

 

The increase of housing prices means more value is in the home, thus more money can be released with any form of available equity release product. Even though there is a potential for more money to be available, it does not mean all homeowners will take the larger lump sum. It is just important to know it is available and there as a back-up should anything untoward happen.

 

Agenda – Lifetime Mortgage

Lifetime mortgages are defined and the London housing sector is ripe for the picking. You have an idea of the solution, but why might lifetime mortgages continue to rise in popularity even in the Big Smoke?

 

Younger generations tend to spend more during an average week than older generations, say those in their 80s. Many retirees are in their 60s, which means they are still spending money as if they were working.

 

If you add the expenditures that occur each week to the recession issues of the past couple of years, there is a detriment to retirement funds for most individuals, even those in London. Especially people living in London, considering the expense of daily living without being overly effusive with spending.

 

Housing costs to run a large home, food purchases, travel, and entertainment are all going to be more in the capital city. As retirement pensions and other retirement investments lost a great deal with stock market troubles, it has left many retirees without enough funds to sustain their retirement life.

 

More so has been the fundamental flaw in endowment mortgage schemes whereby large shortfall are being evidenced upon maturity of the endowment plan. This has left many London homeowners with shortfalls on the repayment of their interest only mortgage. Therefore, London equity release schemes have come to fruition with the likes Of Stonehaven, more2life & Hodge Lifetime whom can provide an escape route via remortgaging onto their London lifetime mortgage schemes.

 

It puts lifetime mortgages on the agenda because they are a way to gain cash for mortgage repayments, general living, extravagant holidays, and any other type of entertainment retirees might wish to enjoy. The cash poor situation suddenly becomes obsolete as the property rich gain a little of that hard earned money back to use as they grow older.

 

Inheritance Factors are Imperative

As you consider whether a lifetime mortgage is right for you, it is imperative to think about inheritance, especially with the associated property values in London borough’s. A large estate when provided to family all at once is subject to inheritance tax over & above the £325,000 allowance for each party. This tax can be so large that it wipes out the entire inheritance. It is the reason those with a huge estate set up trusts and other tax planning instruments which can alleviate some of the IHT burden.

 

A lifetime mortgage can work in one of two ways, both as detrimental to any inheritance you may want to leave behind, but can also be used as a successful vehicle for mitigating IHT issues. Even in London, equity release can threaten an inheritance depending on the type of loan. For instance, the roll-up lifetime mortgage has the interest compounding as long as the mortgage is outstanding. On the other hand it is an opportunity to disperse inheritance without fear of taxes. By using a UK equity release calculator, can help you calculate the percentage of loan to leave as an inheritance.

 

Before entering into any equity release contract, you must seek independent equity release advice from a reputable company. For a full list of equity release brokers visit the Equity Release Council website, where using a postcode search can identify a London equity release brokerage near to you.

Equity Release Schemes: Independent Advisors or Direct Providers?

Monday, October 10th, 2011

People think that going directly to equity release companies rather than going through an independent equity release adviser will save time and money. This is not really true.

 

There are intermediaries such as Equity Release Supermarket who can research the whole of the equity release market which in itself includes over ten equity release providers. Each company themselves may then have several different equity release products which opens a plethora of options for the proposed buyer.

 

So how can approaching one individual company therefore provide the customer with the best advice? Obviously not.

 

So should equity release intermediaries be your only option?

Direct companies offering equity release schemes are now few & far between. Most equity release lenders realise the importance of providing quality advice & ensuring the consumer receives best advice. Again companies like Equity Release Supermarket will receive more favourable equity release deals than if the customer went directly to any lender.

 

If we take Aviva for example..

Their direct sales force has been drastically cut for its halcyon days from over 10 years ago when competition was not so fierce as only a few lenders offered equity release plans. Marketing costs & the funding of a direct sales force comes with a huge financial burden. Company cars, pension schemes & basic salaries plus bonuses all need to be paid for & by whom…the customer.

Compare this to a company such as Equity Release Supermarket. Aviva do not incur any marketing costs for them, no salaried sales force with company cars, so the savings can be allocated elsewhere for such intermediaries.

 

This is shown in the product offering & the competitiveness of the interest rate & deals Equity Release Supermarket receive from Aviva, which can then be passed onto the consumer. Currently there is over 0.5% disparity between the Aviva drawdown scheme sold via Equity Release Supermarket & that sold by Aviva direct. Equity Release Supermarket can offer a special interest rate of just 6.32% & they can also currently offer a free valuation on properties upto £250,000.

 

The only extra fee involved with an equity release intermediary firm will be the advice fee they charge. However, this would seem a fair price to pay for knowing you have the best Aviva equity release deal in the market. This could be possibly saving £270 on the valuation fee & depending on the size of the release applied for could amount to many £1000’s in interest by having a much lower interest rate!

 

Criteria to be an equity release advisor

A lot of equity release scheme providers get their message through to the public via the media; however this alone does not explain all the terms and the details in depth. To understand each and every aspect of a certain scheme one has to have a good knowledge and an in-depth expertise of the terms used in the market as a whole. If equity release is not for you, your independent advisor will should tell you so. They will also consider any financial alternatives such as downsizing, using savings etc before arriving at an equity release recommendation.

 

Professional independent equity release advisors must have the appropriate licences in order to carry out any business. They must comply with all the rules and regulations of the Financial Services Act & deal with equity release schemes that are members of SHIP.

Therefore, always do your research & find an independent financial adviser who is local to you & who will take the time to understand your requirements & find the best equity release UK  scheme for you.

 

If you require independent equity release advice with a no obligation appointment, please call the Equity Release Supermarket team on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk

 

Equity Release – A Support To Your Pension Shortfall

Thursday, August 26th, 2010

After retirement, from both a financial and individual standpoint, achieving a comfortable retirement is a process that requires good planning and many years of saving. For anyone who retires with insufficient pension, they will hardly find any solution out there. This is when equity release can be the best solution to generate income.

 

An increasing number of elderly people are now opting for equity release schemes due to the many advantages it offers. Equity release allows individuals to free up a considerable value locked in their property. By opting for equity release, retired people can easily improve their standard of living.

 

Who is eligible for equity release schemes?

Retired individuals over 55 years of age are the best candidate for equity release schemes. If you are looking for an extra source of income after retirement, equity release can help you unlock the value of your home while still residing in. When opting for equity release scheme, you must ensure that you know all the facts and information related to it.

 

Home reversion and lifetime mortgages are two options you can go for. Lifetime mortgages are appropriate for the ones who have already passed retirement age and unable to raise capital via other sources. Presently, lifetime mortgages are one of the popular equity release schemes that help individuals access the amount of money from the value of their home in the form of mortgage.

 

When looking for the best means to generate income during your old age, equity release schemes could be the best option to go for. However, you should always seek independent equity release advice & this is where Equity Release supermarket & its team of specialist advisers can provide free assistance & advice.

 

Call us today on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk

 

Equity Release Schemes – Live Your Life The Way You Want

Thursday, July 29th, 2010

Gone are the days when you needed to sell your property to unlock the equity in it.

Equity release schemes now give you an opportunity to stay in your home while you can still financially benefit from it. You can utilise the value of your home as a means to receive cash. This can be in one lump sum payment, lump sum & drawdown payments or in the form of regular monthly installments.

 

This new income source can be used in many different ways and is becoming quite popular among people of retirement age. The increasing costs of everyday living expenses puts financial pressure on particularly the retired population.

A lack of finance in retirement can to prevent us from living comfortably on a daily basis. This is when equity release schemes can fulfil their potential in offering homeowners the perfect option to enhance their lifestyles & enjoy life.

You may want to carry out home improvements, lighten some of your financial burden or just spend some more time fulfilling leisure pursuits such as holiday breaks or even worldwide cruises. Equity release schemes enable you to live out all your dreams. The money you get from the equity release scheme can be spent in the way you want. Obviously, this is where independent equity release advice is important.

 

People often want to release the maximum possible from an equity release scheme & invest the proceeds. However this invariably is not the best option.

With the lowest equity release interest rates around 6.5%, by taking a large release from the property in the current econmic climate, it would be impossible (unless excessive risk was taken) that one could obtain the same 6.5% return.

Therefore, it is not good advice to take a large tax free lump sum from an equity release scheme just for investment purposes.

 

A more cost effective way of achieving this goal of increasing your income could be by a drawdown equity release scheme. This scheme would enable an overall cash facility to be provided by the lender. From this facility, an initial tax free lump sum can be withdrawn, leaving the unused facility with the equity release lender that can be drawdown over future years.

The advantage of this method is that interest is only charged on the money withdrawn; not on the remaining funds in reserve. Interest is only charged on this as & when additional funds are taken.

This reserve facility is therefore the solution to providing the income required. The funds can be withdrawn as ad hoc payments in minimum amounts of between £2000-£5000 depending on the equity release lender.

Therefore, depending on the annual income required, this amount can be withdrawn from the equity release drawdown facility meeting the income objective.

 

 

Considerations while opting for equity release scheme

While planning to opt for an equity release loan, there are few important things you need to consider. The lender, via the legal process will first check that all your mortgage & secured loan balances are completely repaid. They will also check whether you are the owner of the property by checking the land registry records.

Moreover, a valuation of your property will also be conducted by an independent local surveyor. Your age is also a determining factor on how much equity you can obtain.

 

If you want to live a stress free life after retirement, choosing an equity release scheme can be  an excellent solution.

 

Contact Mark on 0800 678 5159 to discuss your income options further or visit Equity Release Supermarket

 

Equity Release Schemes – The Main Types of Lifetime Mortgages

Wednesday, July 28th, 2010

Would you like to have a secure and enjoyable retirement?

 

If your answer is yes, then an increasingly effective option for the over 55’s is using equity release schemes.

We all have different financial needs & the more recently developed equity release schemes are designed to meet these requirements. These schemes are incorporated within the lifetime mortgage schemes and reversion plan product range.

From this selection the roll-up lifetime mortgage scheme is preferred by the majority of people.

A lifetime mortgage scheme is specially designed for homeowners who are entering retirement and want to release equity from their home as a secured loan. Under this equity release scheme, the repayment takes place on death or the client moving into long term care.

Once you have opted for this scheme, you can continue living in the same residence for the rest of your life, even if the equity release balance become more than the value of the house. This is due to the inclusion, at no extra cost, of the no negative equity guarantee. This ensures that no debt, over & above the property value can be passed onto the beneficiaries.

Reassurance is therefore given to the children that they cannot incur debt by the actions of their parents.

This rule is a condition of all lenders that are members of the equity release trade body – SHIP (Safe Home Income Plans) who provide consumer protection in the equity release marketplace.

 

In Summary

A lifetime mortgage scheme can divided into the following types.

  • Roll-up lifetime mortgage
  • Fixed payment lifetime mortgage
  • Interest-only lifetime mortgage

 

Roll-up lifetime mortgage – Under this kind of scheme, you do not have to pay any interest or repayments for rest of your life. The interests will be compunded yearly onto your actual loan amount and it will be paid when the home is sold on death or moving into long term care.

 

Fixed repayment lifetime mortgage – In this scheme, there is no interest added to the actual amount but you have to payback a fixed amount when your home is sold. The scheme remains the same even if you sell your home after six months or 25 years, hence it is always important you receive independent equity release advice. This equity release is currently offered by Just Retirement.

The maximum charge that can be secured is 75% of the property value. The value of the overall facility is determined by several factors including your ge, sex, property value & your health & lifestyle situation. Click here to request further details on this unique equity release scheme.

 

Interest-only lifetime mortgage – People who do not want the build up & compounding of interest can choose to make monthly repayments of interest only. Using this method, no interest is added onto your main loan as any interest generated is repaid back on a monthly basis.

Before choosing a type of lifetime mortgage, you must consider your post-retirement income and what your needs will be.

 

To discuss any of the above issues please contact Mark Gregory on 0800 678 5159 or visit the Equity Release Supermarket website.

 

 
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