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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.

Practical Applications of the Pure Retirement Drawdown Plan

Saturday, March 22nd, 2014

Pure Retirement Drawdown PlanPure Retirement recently became the latest equity release provider to enter the lifetime mortgage market.  Launched in January 2014, it signalled the re-emerging confidence & growing popularity in the equity release market.

 

However, it makes no sense for a new lender to enter the market without finding a niche for itself. So, over the past few months Equity Release Supermarket advisers have encountered practical experience of where the Pure Drawdown Plan has fitted in providing best advice scenarios. Here we help explain where we feel the Pure Retirement Plan wins, in an already competitive equity release marketplace.

 

First, the Pure Drawdown Plan in Detail

Before we enter the wheres & wherefores of how the Pure Plan fits in with equity release recommendations, let’s look at the Pure Retirement plan facts

 

The Pure Retirement Drawdown Plan is the first offering from the new lender formed by funding assistance from equity release brokerage – Age Partnership. This follows the similar relationship that exists between more2life & Key Retirement Solutions and represents a growing trend where brokers have become equity release providers. This similarity is also evidenced from where the funding source is derived, in that Pure Retirement relies also on the same annuity backed insurer to give it the ability to fund its lending – Partnership Assurance.

 

The Pure Drawdown plan is a lifetime mortgage that starts later in life than most equity release schemes with a minimum age at commencement of 70. It’s aimed towards the higher end of the loan-to-value ratios without any medical underwriting, which the enhanced lifetime mortgage plans have the advantage of.

 

The starting percentage is 36% of the property value at age 70, which compares favourably with other high LTV products. Albeits not the highest maximum equity release plan out there, it has a neat trick up its sleeve with how it can still compete with these maximum lifetime mortgage plans. Details of how are explained later in this article.

 

As a member of the Equity Release Council, the Pure Drawdown Plan offers a free no-negative equity guarantee and 100% ownership of the home. Portability enables you to still move house once the plan has been set in force and the interest rate is fixed for life, launched at a reasonably competitive 6.74% monthly rate (7.1% representative APR).

 

The minimum loan is higher than most at £25,000, which is where Pure Retirement’s market lies and is available in England, Scotland & Wales.

 

This is a roll-up lifetime mortgage plan with the option of a cash reserve facility. Therefore, Pure Retirement will calculate the maximum release possible, from which an initial amount can be withdrawn. Any funds untaken, remain in a cash reserve held by Pure Retirement at no cost until needed in the future. Should it later be necessary to access these funds, they can be drawndown in minimum amounts of £5,000 with no further charges.

 

Where Pure Retirement Lifetime Mortgage Strengths Lie

As an independent equity release adviser, one of the most common reasons for client objection lies in the costs of implementing an equity release scheme. Here is where the Pure Drawdown Plan wins – set up costs!

Only one equity release company has previously offered a scheme whereby the standard terms dictate a cost effective route to market for any client taking out a lifetime mortgage, & that’s Partnership’s Enhanced Lifetime Mortgage. Some lenders will temporarily create pockets of time whereby a cashback exists or a reduced interest rate for a limited period, but these come & go.

 

However, Pure have created these features as a permanent fixture & all credit to them in seeing this gap in the market and understanding what the consumer requires. Afterall, many applicants want a release of equity to help them financially as they have limited funds in the first place. By asking them for more money up front, it makes the process more difficult for them to get the whole application underway. Pure Retirement alleviate these areas, both pre & post application stages, let me explain how and why.

 

Pure’s Set up Costs

Pure Retirement provide a two tier set up cost operation; one for equity release loans between £25,000 & £44,999, the other based on loans in excess of £45,000.

All equity release schemes will normally incur set up fees in four main areas – Valuation, application, solicitor & adviser charges.

 

Pure approach this differently in the sense they aim to cover the majority of costs; the more one borrows, the greater the help provided. For loans over £45,000 the cost is enhanced furthermore by them providing: –

 

  1. FREE valuation
  2. NO application fee
  3. Contribution of £600 towards legal costs
  4. Contribution of £500 towards the advice fee

 

Therefore, dependent upon how much the advice fee being charged is, which in the case of Equity Release Supermarket its £895; the net advice fee cost would only be £395. Bearing in mind we can source an ERSA equity release solicitor, for a reasonable £495 + VAT & disbursements (including home visit) the £600 contribution from Pure Retirement should cover this on a standard freehold property. This effectively means to implement a Pure Drawdown Plan with Equity Release Supermarket would only cost approximately £395!

 

Where Does the Pure Retirement Plan Offer Clients Best Advice?

As previously stated, Pure Retirement Drawdown Plan has been targeted to meet those clients looking towards a maximum equity release in order to assist them with their retirement needs.

A recent example of how the Pure Drawdown Plan can still offer a client a greater net amount, even though the maximum release is lower than a competitor, can be illustrated by a case I recently encountered: –

 

CASE STUDY

Pam, aged 79 was looking to move property & required a lifetime mortgage to help her with the purchase. She was in good health & needed the maximum release possible to not only help with the purchase but also the moving costs & legal fees.

The purchase price for the 3 bedroom flat in Cornwall is £140,000.

 

Pamela requires the maximum release possible which following extensive research would point towards the Just Retirement Lump Sum Plus plan which would release £64,400 at an annual interest rate of 6.75%. This comes with a free valuation, £600 application fee, legal costs & advice fee.

 

Looking further down our research table identifies the Pure Drawdown Plan with a 6.74% monthly interest rate. However, the maximum release Pure would offer would be a lower amount of £63,000. But upon delving deeper into this product & by analysing the charging structure it shows that the actual Pure Retirement net release could be higher.

 

Fee Type /Provider

Valuation

Application

Legals

Advice

Legal Contribution

Advice Contribution

Net Costs

       Just         Retirement

FREE

£600

£600

£895

£0

£0

£2095

Pure Retirement

FREE

£0

£600

£895

£600

£500

£395

 

Evidently, the Pure Retirement plan has £1700 reduced set up costs, compared to the Just Retirement plan. The next part of this calculation is then offsetting this £1700 advantage that Pure Retirement has against the £1400 extra that Just Retirement can release as their maximum.

 

The final result therefore shows that Pure Retirement will have a greater net release to Pam of £300 and therefore proceeds with the recommendation as the £300 would be more advantageous in her pocket.

The message therefore is never look at the top line maximum amount, but always to consider any incentives that may help improve the net offering.

 

Existing Equity Release Customers Looking for Additional Funds

Other areas where Equity Release Supermarket customers have already benefitted from the new Pure Retirement lifetime mortgage is under two scenarios: –

 

  1. Where they have an existing equity release plan & need further funds.
  2. If looking to obtain a lower interest rate, yet no lender can provide sufficient funds to enable the equity release remortgage

 

Following the routine check to see if any additional borrowings are available with their existing lender, it’s then our duty to research the whole of the market to see if any other equity release providers could assist.

 

One of the issues against switching equity release schemes is usually the set up costs that prohibit the transfer. Under the two scenarios, in the first the charges could swallow up any of the spare cash being targeted, and in the 2nd scenario the set up costs make any transfer non-profitable as these costs offset any future savings in interest.

 

Its therefore the case that set up costs can prevent future maneuverability with any home equity scheme.

 

This is where the Pure Retirement Drawdown Plan can come into its own with its lower set up costs. Under both scenarios, Pure’s reduced set up costs will help with the switching of equity release schemes. Under the 1st scenario it will lead to more funds being available to withdraw & secondly in obtaining a lower interest rate its helps bring forward the break-even point.

 

Summary

Set up costs are an important aspect in the consideration of accepting any equity release recommendation. However, your adviser should consider the whole picture and features necessary in your meeting your requirements. This is why any equity release adviser should be experienced, qualified and importantly independent too.

 

If you feel that the Pure Drawdown Plan could be of benefit to you, please contact Mark Gregory on 0800 783 9652 or email mark@equityreleasesupermarket.co.uk.

 

 

Further Information

 Request Pure Drawdown Quote | Pure Product Specs | How Much Can I Borrow? | Contact Us

Can I Move Home with Equity Release?

Wednesday, February 26th, 2014

Moving Home With Equity ReleaseOne of the most common questions we get asked as equity release advisers is whether a lifetime mortgage is ‘flexible’ enough to meet any future change in circumstances?

 

Having reached retirement, experience has taught us all that life can be full of surprises and quite rightly this question is always high on the agenda.

 

This article has been written using my 10 years equity release experience & how I have helped guide my clients towards their ultimate goals, but at the same time alleviating any inhibitions surrounding equity release and moving home in the future.

 

The most common apprehensions regarding flexibility and moving or buying a new home can be summarised as follows:

  1. Can I move home if I have already taken out an equity release plan?
  2. Can I use equity release to purchase a new property
  3. How much can I raise on a new home using maximum equity release schemes?
  4. Can I transfer my existing equity release scheme to a new home?
  5. Can I still take out equity release if I downsize?
  6. If moving house, is it worthwhile transferring, or taking out a new plan?

 

So how does an equity release adviser dispel the fears and help their clients overcome the concerns that a release of equity mustn’t feel like a noose around their neck?

 

Considerations on Moving Home from an Equity Release Advisers Point of View

When we consider the question of a possible future house move, we can divide this into three very different scenarios; each one deserving separate consideration in its own right: –

  1. The first equity release scenario captures the proposition of using a lifetime mortgage, or home reversion plan to help fund the purchase of a new house
  2. The 2nd situation analyses the advice & legal process required when purchasing or moving home, utilising an existing equity release plan.
  3. Lastly, we explain the advisers perspective on what options are  available to a client with their existing equity release mortgage, upon moving home

 

Scenario 1 – Can I use Equity Release to help fund a house purchase?

An increasing number of enquiries seem to be coming in from people who are looking to move home, and this can be for various reasons. Some are looking to move nearer to their family for support, others are looking to downsize to repay loans and mortgages. Still others simply want to buy that bungalow they had always dreamed of for when they retired.

 

In the majority of cases, the best way to use equity release schemes to help fund a house purchase is to transact them simultaneously. This means involving an equity release application to be used as part of the legal process to buy. Consider this theory as exactly the same principle as using a conventional residential mortgage to help buy a new property.

 

In essence, by taking equity release at the same time as house purchase will save money by not duplicating the legal work, should a release of equity be needed at a later date. The rationale is that only one set of legals are required should equity release & the purchase be transacted simultaneously. However, if a release of equity is taken post purchase, then two set of legal costs are incurred; at the time of the house purchase, but then again later when equity release is done in isolation.

 

The rules are fairly straightforward, whether you use a lifetime mortgage or a home reversion plan for this purpose. A given percentage of the value of the proposed purchase property would be made available, depending on the age of the youngest applicant, and some or this entire figure would be sent to the conveyancer on the day of purchase to enable completion to take place.

 

Case Study:

Mr & Mrs Townley are aged 65 and looking to buy a property nearer to their daughter at a cost of £200,000. Their own home has been sold for £180,000 and, bearing in mind the additional costs involved, they feel they would need a further £30,000 to complete the purchase.

Following research, their lifetime mortgage adviser has recommended the Aviva Lifestyle Flexible Option where they could release upto 25% of the value of their new property. This potentially could provide them with a maximum release of £50,000.

They decided that they only want £30,000 of this for now but, as they don’t know what the future may hold, they ask for a cash reserve facility to be set up so that they could access the other £20,000 in the future, just in case they need it later.

 

Scenario 2 – Can I move home AFTER releasing equity on my home?

This is a different question altogether, but is definitely another one that comes up most of the time. Most people want to know before they enter into an equity release agreement, what would happen if they moved home in the future? This could be downsizing when one partner is left on their own, or moving into sheltered accommodation, if health dictates it becomes necessary.

 

First of all it is important to acknowledge that any lender that is a member of the Equity Release Council (which recently replaced SHIP) will allow the transfer of an equity release plan to a new, suitable property. Portability is an important facet of all equity release schemes.

 

Important considerations for anyone releasing equity include what they think MAY happen, or which is MOST LIKELY, as none of us know what’s around the corner.

 

If downsizing is the most likely outcome, then it should be very easy to find a lender that will allow this with the facility to move the equity release plan at the same time. A valuation would be carried out on the new property and the maximum configured equity release would be calculated. Having access to a lifetime mortgage calculator would be an advantage.

 

If the amount currently owed, is in excess of the maximum amount available for release on the new property, then the excess would need to be repaid from the profit made through selling and buying the cheaper property.

Of course some people want to have the flexibility of repaying the loan in full if they downsize later on and this is where some care is needed from outset to ensure this is possible.

 

As lenders become more attuned to what is important to equity release customers we are seeing some innovative thinking and I for one hope that this is a trend that will continue to grow over the coming years.

 

Scenario 3 – What should I do with an existing equity release if I want to downsize or purchase new?

This scenario is a continuation of the previous section, albeit taking into account in greater detail the options available & what should be done with an old equity release plan. It would be amiss of any adviser to automatically assume it would be in the client’s best interest to port an old lifetime mortgage or home reversion plan to the new property.

 

This is a key opportunity for an overall review of the older plan to establish its competitiveness in today’s equity release environment. From my experience of working at Norwich Union Equity Release (latterly Aviva), I am aware of older legacy equity release plans that in today’s world are outdated and uncompetitive.

 

My Experience of Norwich Union’s Legacy Equity Release Plans

The forerunner of all of Aviva’s equity release plans was called the Capital Access Plan. The Norwich Union Capital Access Plan had an interest rate, not charged against the balance, but calculated against the property value escalating over time. People with these plans who have seen a large increase in property value, will also had seen a proportionate increase in their equity release balance.

 

Another legacy plan which is no longer available is the Norwich Union Index-Linked Cash Release Plan. This a scheme which offered a maximum equity release lump sum from age 55, but with an interest rate linked to Retail Price Index (RPI). This Index Linked Cash Release Plan had a minimum interest rate of 4.89%, rising to a maximum rate of 10.14%. The calculated rate was dependent upon on the annual change in RPI which was then added to the minimum rate of 4.89%. Hence, this scheme did not provide as much certainty as today’s lifetime mortgage fixed rates.

 

From thereon in, Norwich Union or Aviva Lifetime Mortgage schemes had interest rates over 8%pa and potential early repayment charges of 100% of the original balance borrowed. Its schemes such as these that need assessing as to whether they should continue, or if favourable, could be repaid upon sale & a new plan taken upon simultaneous purchase of the new property. With rates today from Aviva as low as 5.68% annual, it could make sound financial sense to consider a new scheme which could save many £1,000’s over time by switching.

 

Free Initial Consultation

It is therefore essential for an experienced independent equity release adviser to undertake a full review of the entire situation & provide an impartial recommendation as to what is best advice moving forward. This will involve requesting an upto redemption statement from the existing lender, analysing the existing scheme & importantly assessing all the features including potential early repayment charges.

 

Equity Release schemes that were taken out some time ago are usually not as competitive, or flexible as plans around today, given the period of low interest rates incumbent over the last 2-3 years.

 

I would advise ANYONE thinking of moving to take advice as it may well be cheaper to change lender than staying with your current one and transferring your plan to the new property. The only way of finding this out is to take advice from an Independent Equity Release Adviser that is able to research the WHOLE of the market. By conducting a switch plans analysis, Equity Release Supermarket can address whether it would be worthwhile, or not, to switch equity release plans when moving home.

 

 

Examples of lenders already attuned to the option of downsizing – Hodge Lifetime

At the moment if anyone is thinking of downsizing in the future and repaying their equity release plan in full, then serious consideration should be given to a new plan such as the Hodge Lifetime Flexible Mortgage Plan.

 

This plan allows the borrower to repay the whole amount WITHOUT PENALTY if they decide to move home & downsize, as long as this is at least 5 years after inception of the plan.

 

Alongside this downsizing protection option is the fact that, if something unforeseen should happen and you need to move and repay during the first 5 years then the Hodge Lifetime penalty for doing so would be capped at 5% of the initial release in year 1, 4% in year 2, 3% in year 3, 2% in year 4 and then 1% in year 5. Significantly, the Hodge Lifetime penalty is more favourable than many of the gilt linked product related early repayment charges.

 

I believe this gives an added degree of flexibility for equity release consumers, and I hope it’s an indication that lenders are changing the way they change tact & begin providing greater flexibility as the need to move home in the future increases.

 

The fact remains that it is possible to move home and it’s imperative that you get the right advice when considering equity release initially AND when thinking of a house move as well.

 

Summary

It is probably one of the most important decisions you will make financially, as the decision you make now will not only impact on your future, but also your children & grandchildren’s future.

 

These are the reasons why we at Equity Release Supermarket always offer a free, no obligation, initial consultation which can be in the comfort of your own home or over the telephone, whichever is preferable.

This initial consultation gives us the chance to ask our clients about their objectives as well as their future plans, so that we can tailor any Equity Release scheme we recommend to each individual set of circumstances.

 

For your FREE, NO OBLIGATION, initial consultation (whether it’s your first time or if you want to review your current scheme) please call Mark on 07966 889597 or e-mail mark@equityreleasesupermarket.co.uk

 

Equity Release Is For Life, Not Just For Christmas

Sunday, November 3rd, 2013

Equity Release is a Lifetime MortgageI recently read an advertisement in a National newspaper extolling the virtues of Equity Release and was surprisingly written on behalf of one of the main equity release brokers based in Preston. All fine I thought until I saw that it was aimed at grandparents struggling to buy Christmas presents for their grandchildren.

 

It created a small furore amongst my colleagues and peers. The blogs were alive with advisers & political commentators slating the fact that equity release was being considered for such short term measures. Not only that, but to take equity release to spend on the grandchildren, would effectively be spending their own inheritance!  With the compounding effect of the interest over the remaining years, this will turn out as one expensive Christmas present.

 

After all, the most popular type of equity release is the lifetime mortgage; appropriately named & for a reason. These schemes are designed for longevity, not short term or for frivolous reasons, where better alternatives may exist.

 

Some were arguing that whatever legal reason people wanted a release of equity for, withdrawing capital was their choice, not ours as advisers, and on the face of it that is correct.

However, when I looked into this scenario further this played on my conscience for personal reasons and I had serious reservations.

 

I have five grand-kids, all under five years old. I had to check with my wife, but on average we spend about £150 to £200 on each. Extravagant ? Maybe. Worth it ? Definitely.

 

With various other gifts for family and friends we spend about £1,500. Agreed not easy on low pension income and little liquid savings.

 

If I was in that position and saw the advertisement I would almost certainly look into the possibility of equity release schemes. I would hope that I would employ the services of an independent equity release adviser i.e. someone like me who would strongly advise not to go down this route.

 

And here are the reasons why:-

  1. The minimum initial lump sum on any equity release scheme is currently £10,000. This would have to equate to £2,000 for this Christmas, £8,000 in the bank for the next 4 Christmases. The cash in the bank may attract 1-3% interest whilst I would be paying up to 6% interest on the mortgage. Not a good idea
  2. The set up fees, depending on the lender, could be as high as £2,000. Acceptable if you are considering a large expense such as buying a new car, a holiday of a lifetime, clearing an mortgage or giving the grand-kids a start in life for house deposit or university fees. Therefore, as a proportion of a £10,000 release, set up costs can be a considerable percentage of the initial release. Not so good to borrow £2,000 for Christmas gifts on this basis.
  3. If, like me, your intended beneficiaries are your grand-kids then they are actually buying their own gifts via their future inheritance. Let’s assume £10,000 on a normal roll-up lifetime mortgage, even on the lowest rate with Aviva Flexi Plan currently at 5.62% (5.8% APR) and deducting the set up costs from this, would in 10 years have accrued to about £17,276. So 10 year’s worth of Christmas gifts has cost £7,276.

 

I applaud the fact that some of the broker companies are bringing Equity Release to the fore and the pros and cons of equity release schemes are highlighted to the general public.

 

As a dedicated Equity Release specialist I am convinced of the merits of raising capital by these means as long as the following measures are taken: –

  • All possible alternatives are discussed with your adviser and broached with the children. Equity release is classed as a loan of last report by ourselves
  • The initial release matches your needs for the first 12 months of your spending plans i.e. don’t take any more than you actually need
  • You receive independent equity release advice from a FCA (Financial Conduct Authority) qualified adviser
  • The schemes recommended are members of the Equity Release Council (ERC) which ensures they come with the equity release code of conduct indoctrinated
  • You receive separate legal representation from that of the lenders. As from 2014, this will need to involve a face-to-face meeting with your solicitor for added protection
  • You receive a Key Facts Illustration and Suitability Report covering all aspects of your adviser’s recommendation including set up costs, interest rate, future balance & early repayment charges.

 

I have personally seen the benefit equity release has made and have the testimonials to show the satisfaction & difference a lifetime mortgage can make to someone’s life.

If taken for the right reasons, under the right circumstances and with the right advice, equity release schemes can prove to be the right choice.

 

If you require further information on whether equity release schemes could be the right choice for you, please contact Barry Adnams on 07989 281108 or email barry@equityreleasesupermarket.co.uk

 

Equity Release – Retiring Without Worrying About The Future

Thursday, July 21st, 2011

Halifax equity release is a good option for retired individuals who want to live a tension-free lifestyle after retirement. Unlike traditional mortgage plans, Halifax equity release is specially designed for individuals who are looking for home safety along with a better lending choice. This mortgage option can be used to raise equity from your property if you are over age 55 & are now in receipt of retirement income.

 

The money raised through the Halifax equity release mortgage can be spent the way you want. So, irrespective of whether you want to go on a holiday, exotic cruise or make home improvements, opting for equity release can be great at meeting your financial needs.

 

With inflation constantly on the rise & budgetary constraints we are all facing currently, retired individuals also are facing a lot of problems coping with their finances. However, there are certain requirements one needs to fulfil in order to qualify for Halifax equity release schemes. For instance, applicants must be above 55, retired and possess property of their own. The amount of equity one can release through this scheme depends on the age, pension income & the market valuation of their property.

 

So, if you are planning to go for Halifax equity release, it is always better to ensure that your property is well-maintained. Additionally, if you have a current mortgage on your property this will need to be repaid on competion of your new Halifax retirement mortgage. This will be paid for from the proceeds of the Halifax application & will be redeemed by the solicitor acting on your behalf. Therefore, whenever the interest only mortgage calculations are made the existing mortgage figure should always be taken into account.

 

The good news however, is that if you do have a current mortgage, no matter the size, & remortgaging to the Halifax Retirement Home Plan then there are some excellent deals available. As of July 2011, Halifax remortgages will provide a FREE valuation, FREE standard legal fees & on some products we can even obtain NO application fee.

 

As there are different Halifax equity schemes available today, you must carefully research your options. This way, you can go for one which suits your needs & receive advice from an independent equity release adviser who can provide you with best advice from the whole of the market.

 

If you wish to discuss the current Halifax Retirement Home Plan deals via Equity Release Supermarket contact the team on freephone 0800 678 5159 or email mark@equityreleasesupermarket.co.uk

 

Equity Release Schemes – Some Important Facts You Must Know

Wednesday, September 15th, 2010

Equity release schemes offer you access to the equity that you have built up in your property which in many cases has escalated significantly since it was originally purchased many years ago.

You may have heard the saying that people in retirement understand the concept of ‘asset rich, but income poor’. This relates to the commonly seen scenario for many retirees during their time of leisure after working lives.

 

This equity tied up in the property can be released without the need for selling it. They are great financial tools for individuals over 55. With equity release schemes, you can get the money that you have invested in your property while remaining in it. The equity release companies will recover the loan amount once the house is sold after the homeowner(s) has passed away or gone into long term care.

 

Who can qualify for an equity release scheme?

If you are over 55, not necessarily retired and own a property, you are most likely eligible for an equity release scheme. As there are changes in the financial and legal system from time to time, it is advisable to seek the professional services of an independent equity release adviser such as Equity Release Supermarket who can help you determine the best scheme to meet your requirements.

 

For what purpose can you use the money?

After opting for an equity release scheme, you can utilise the amount for any purpose you want. Many people during their old age look for tax-free means to access their equity to help their children or relatives purchase a new property. The advantage of this kind of a scheme is that it allows homeowners to stay in their property until the property is sold.

In the past decade, thousands of people in the UK have opted for equity release schemes to fulfil their needs after retirement. If you are retired and unable to cope with daily expenses on your pension, equity release is the perfect solution.

 

If you feel one of the experienced Equity Release Supermarket advisers could be of assistance to your retirement needs, please contact them on 0800 678 5159. They are always on hand to take your enquiry & provide either face to face or telephone based advice to suit your requirements.

 

Secure Your Life After Retirement With Equity Release Schemes

Tuesday, August 10th, 2010

Are you thinking about how to manage finances during retirement period?

If your answer is yes, then equity release is an ideal solution for you.

If your age is more than 55 years and you own a property, then equity release could unlock your money for your retirement.

Equity release schemes are designed in such a way that they allow the homeowners to get lump sum money or regular income against their home.

One of the best things about equity release schemes is that you can get the value of your home without leaving it.

 

Moreover, equity release schemes offer tax-free cash which can be used in different ways such as:

• You can buy a second home
• Buy a new car
• You can also pay off your outstanding debts

 

 

Due to different needs, two different equity release schemes have been introduced in the market.

This includes:

Home reversion plan – This equity release scheme is calculated on the basis of life and age expectancy. The youngest age for a Home reversion plan is 65. Home reversion plans offer a better deal for much older homeowners who maybe feel that house prices won’t increase greatly in the future. For instance, people who have crossed age 70 can enjoy more benefits than people who are still in their 60’s.

Additionally, people who are in poor health would benefit greatly from a home reversion scheme. As life expectancy governs the amount of release quid pro quo.

 

Lifetime mortgage scheme – Under this scheme, you can get a lump sum amount of money secured against your property. One of the best things about this scheme is that the money and interest is paid by selling the property when you die or move into a care home. There are no monthly payments to be made, hence it has no effect on your monthly budget.

If you have decided to opt for equity release schemes then hire an independent equity release adviser who will help you in getting the money against your property.

An Equity Release Scheme – The Perfect Way To Enjoy Your Retirement

Monday, August 9th, 2010

Equity release schemes are preferred by an ever increasing number of retired homeowners, as they allow people to release tax-free cash against their property.

If you are 55 or over and own your own home then you are eligible to release some cash to boost your finances in your retired life. Home reversion plans and lifetime mortgages are the two main types of equity release schemes.

To release cash against your property, you must have little or no mortgage and the value of the property should be more than £70,000. Once you have received the lump sum of cash then you can spend it anyway you want. Compared to other loans or schemes, equity release schemes offer various benefits.

 

Advantages of equity release schemes

One of the best features about equity release is that it allows you to live in your property even after selling it against the lump sum amount of cash. Also, you can transfer the equity plan to another property without paying any financial penalty. By opting for an equity release scheme, you do not have to worry about repayment as it will be done on death of the second owner or moving into long term care.

 

As equity release schemes offer tax-free cash, you can spend it in different ways such as:

• Buy a second home or a car
• Repay outstanding debts
• Invest in home/garden improvement projects
• Go on a holiday
• Improve your retired lifestyle

 

If you want to know the amount of cash you can release then an online equity release calculator is the best option. Once you have applied for equity release, the whole process will take around 6-8 weeks. At that point you will then receive the tax free cash & it can be paid by cheque from your solicitor or it can be sent by telegraphic transfer directly into your bank account.

 

The process from application stage will require the services of an experienced equity release solictor, your independent equity release adviser & the equity release provider.

Your adviser will liaise between all parties concerned in order that the application runs smoothly & can ensure that any issues can be resolved quickly.

For these services the adviser will usually charge an advice fee which is deducted on completion of the equity release scheme. To understand the equity release process in further details including the step by step guide click here.

 

Equity Release Supermarket advisers can help you calculate the amount you require & the equity release scheme that best meet your individual requirements.

 

Please call freephone 0800 678 5159 to speak to an qualified adviser today

 

Equity Release – Retiring Without Worrying About The Future

Wednesday, July 21st, 2010

Halifax equity release is a good option for retired individuals who want to live a tension-free lifestyle after retirement. Unlike traditional mortgage plans, Halifax equity release is specially designed for individuals who are looking for home safety along with a better lending choice. This mortgage option can be used to raise equity from your property if you are over age 55 & are now in receipt of retirement income.

 

The money raised through the Halifax equity release mortgage can be spent the way you want. So, irrespective of whether you want to go on a holiday, exotic cruise or make home improvements, opting for equity release can be great at meeting your financial needs.

 

With inflation constantly on the rise & budgetary constraints we are all facing currently, retired individuals also are facing a lot of problems coping with their finances. However, there are certain requirements one needs to fulfil in order to qualify for Halifax equity release schemes. For instance, applicants must be above 55, retired and possess property of their own. The amount of equity one can release through this scheme depends on the age,  pension income & the market valuation of their property.

 

So, if you are planning to go for Halifax equity release, it is always better to ensure that your property is well-maintained. Additionally, if you have a current mortgage on your property this will need to be repaid on competion of your new Halifax retirement mortgage. This will be paid for from the proceeds of the Halifax application & will be redeemed by the solicitor acting on your behalf. Therefore, whenever the interest only mortgage calculations are made the existing mortgage figure should always be taken into account.
The good news however, is that if you do have a current mortgage, no matter the size, & remortgaging to the Halifax Retirement Home Plan then there are some excellent deals available. As of July 2011, Halifax remortgages will provide a FREE valuation, FREE standard legal fees & on some products we can even obtain NO application fee.
As there are different Halifax equity schemes available today, you must carefully research your options. This way, you can go for one which suits your needs & receive advice from an independent equity release adviser who can provide you with best advice from the whole of the market.

If you wish to discuss the current Halifax Retirement Home Plan deals via Equity Release Supermarket contact the team on freephone 0800 678 5159 or email mark@equityreleasesupermarket.co.uk

 

How To Fund The Purchase Of A New Property With An Equity Release Scheme

Wednesday, January 20th, 2010

The advantages of equity release being used to raise capital from property have been widely advertised. It is commonly known that their uses have been to enhance retirement lifestyles by way of home improvements, holidays, debt consolidation etc.

 

However, a further function of this increasing popular over 55’s mortgage is its ability to assist with a house purchase.

 

In essence, an equity release scheme is a mortgage secured on ones property; however unlike a conventional mortgage there are no monthly payments. Instead, the interest charged by the lender is added to the loan & compounded over the term. Therefore, similarities between equity release & a household mortgage co-exist. Furthermore this similarity extends to the house buying process.

 

When funds need to be raised to assist with a house purchase, a conventional mortgage is normally utilised to bridge the shortfall between the purchase price & any deposit already held. Equity release can also assist a house purchase by using exactly the same principles as a mortgage.

 

Experience has shown that as people move through their retirement years their health may deteriorate & disability may result. As a consequence, their existing property may become less accessible if stairs or even property location is an unsuitable feature.
Aspirational requirements may dictate that a move to a more ‘up market’ is required. Many reasons for a move in retirement exist.

 

Upon review therefore, it may be necessary to look for an alternative property which meets the new objectives of accessibility, which could either be buying a bungalow or even moving nearer to children, who can take more care.
As the purchase price of a bungalow or new house could be more expensive, there may be a cash shortfall to fulfill the transaction.

 

Equity release can therefore be applied for on the new property to bridge the difference between the equity available from the sale of the existing house & the purchase price of the new house. At this point, it would be advisable to approach an experienced independent equity release adviser such as Equity Release Supermarket, who can source the most suitable equity release scheme available for house purchases.

 

The adviser will need to make calculations to ascertain exactly how much capital will be required, as not only is there the equity shortfall, but also whether any additional costs including solicitors fees, stamp duty, removal costs even home improvements may be required to be included in the equity release application?

 

A recommendation can then be made as to which equity release scheme would offer the best terms for the purchase; be it lowest interest rate, flexibility via drawdown or early repayment charges & taking advantage of any special lender offers that are currently available.

 

Other factors which need to be considered are whether any existing mortgage needs to be deducted from the sale proceeds, as this will reduce the equity that can be used as a deposit. Once these calculations & recommendations are made, the application can be submitted to the prospective equity release company.

 

The equity release application process is virtually the same as any mortgage: –

  • Valuation carried out by a independent surveyor appointed by the lender
  • Solicitor instructed to commence legal work & enquiries made on behalf of the applicant
  • Upon satisfactory valuation, an offer is then made by the lender
  • Upon receipt of the offer, the paperwork is drawn up by the solicitor which is signed by the client in due course
  • Exchange takes place & completion date set.
  • On the day of completion, the solicitor requests funds from the equity release provider & along with the client’s deposit, transfers the proceeds to the vendor’s solicitor to complete the legal process & purchase.

In summary, an equity release plan can be used to actually move up market to a more expensive or suitable property to meet future retirement needs. This could be for disability reasons, live in close proximity of the children or even aspire to a house of your dreams!

 

 
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