Posts Tagged ‘lifetime mortgages’
Saturday, July 3rd, 2010
Equity release schemes are more commonly & individually known as lifetime mortgages, home reversion or home income schemes. These schemes are the perfect solution to purchase a new car, get funds for a new home improvement project, to pay for a holiday or to simply make your everyday life more comfortable.
Equity release schemes enable you to release money against the overall value of your home. The debt is then repaid from the sale of your property after your death, moving into long term care or earlier sale of the property.
X
How do equity release schemes work?
While there are different schemes that offer a lump sum or/and regular income, they work on two principle’s.
The lifetime mortgage schemes provide you a with a capital amount from the value of your home with the amount to be repaid being determined by the interest rate charged & how long the interest roll’s up over.
Home reversion schemes still provide you with a capital amount, however the reversion company takes a percentage of the value of the property in return. Therefore, there is no interest element. Once the property is finally sold on death or long term care, the original percentage sold is retained by the reversion company & the beneficiaries receive the remainder. e.g. if 50% of the property was initially transferred to the home reversion provider, then on the eventual sale of the property there would still be 50% of this value to pass to the beneficiaries.
The minimum age for lifetime mortgages is only 55, whilst the minimum age for a home reversion scheme is 65. The property should must be owned & be in a reasonable condition. If a mortgage exists before inception, then this needs to be repaid from the equity release proceeds or any savings held. The equity release scheme, whether lifetime mortgage or home reversion scheme can be the only secured loan on the property.
X
The attractive features of an equity release plan
Equity release plans can offer you a regular income, a lump sum amount or both with the money released being free of income tax. However, if the amount is invested & you are a taxpayer, you may need to pay tax on any interest gained.
In order to unlock equity, there is no need to sell or move your home. Using an equity release scheme, you get assurance that you can continue to reside in your home until you die.
If you do not have any family or children to leave your inheritance to, then an equity release scheme can be an extremely attractive concept.
With the above advantages that equity release schemes offer, it could be the perfect way to unlock your money & enoy a comfortable retirement.
X
If yu have any questions on the topics discussed above then please contact the Equity Release Team on 0800 783 9652.
X
Tags: equity release, equity release schemes, home reversion, home reversion schemes, lifetime mortgages, Roll up lifetime mortgage
Posted in Equity Release | No Comments »
Friday, July 2nd, 2010
Good news is back in the equity release market as Home Reversion Plan provider Home & Capital increase on two fronts the amounts they will lend on their products.
X
Recently there has been a reduction in the number of equity release schemes available in the market which has resulted in fewer options for those in need of cash for their retirement plans.
Therefore news that Home & Capital are reversing this trend with its home reversion plans is excellent news.
X
The latest calculations now show that for a male aged 70 the home reversion rate has now increased from 43.25% to 47%. That’s a healthy increase on the amount Home & Capital will lend & represents a good increase on the equity release scheme funds clients will receive.
X
Secondly, all Home & Capital reversion plans have had an increased the ceiling on the maximum amount customers can raise.
This has now risen by over 41% from its previous maximum of £85,000 upto £120,000.
The maximum percentage of the property you can sell with Home & Capital home reversion plans is 95%.
Existing offers on the Home & Capital reversion plans will continue. This includes no arrangement fees & a special offer of a free valuation on all applications made before 31st July 2010.
The minimum age for the home reversion plans is 65+.
X
These increases come at a time when retired people who wish to consider equity release are being hit on most sides.
Lower interest rates on their savings coupled with the impending increase in VAT will all affect the elderly population greatly over the next 12 months & beyond.
Therefore, there is some light at the end of the tunnel for the elderly who need financial assistance & a supplement to their capital or to boost income.
X
With property values showing a steady, yet unspectacular increase since the start of 2010 many people in retirement can be sitting on a large amount of equity that can be utilised.
People are increasingly beginning to embrace the idea that their property is a legitimate asset that can be used to release equity - either via downsizing or via equity release schemes.
X
To discuss your equity release requirements further please contact Equity Release Supermarket on 0800 783 9652 or email - mark@equityreleasesupermarket.co.uk
X
Tags: Add new tag, equity release, equity release schemes, free valuation, Home & Capital, home reversion, home reversion schemes, lifetime mortgages, no application fee
Posted in News | No Comments »
Wednesday, June 30th, 2010
It is becoming more common for people reaching state retirement age to still have a mortgage running into retirement.
Even more so, there is a growing demand for extra mortgage lending once they are in retirement.
Here we discuss what retirement mortgage options are available, acceptable income sources & where to look for independent advice on these matters.
X
There can be many reasons for having a mortgage beyond state retirement age; namely poor performing low cost endowments, previous unemployment or even long term health issues.
A mortgage that runs into retirement can have major issues with both affordability & term to its repayment date. Most lenders will require repayment on a mortgage by age 75.
We will now look at ensuring all available income is being claimed. Once researched, we can then discuss which of these are eligible for inclusion in mortgage affordability calculations.
X
So what options are available on reaching retirement itself?
Well this will depend on affordability & how the financial management of the mortgage itself can continue. The main issue with regards to affordability of an interest only mortgage at retirement is how much retirement provision has been made & maximising any other available sources of income.
X
What Type of Retirement Incomes Should I be Receiving?
Having reached state retirement age the state pension will become available. However, the level of this is dependent upon national insurance contributions paid over one’s working life. The current basic state pension is £97.65pw & on its own would not be sufficient to support an interest only mortgage payment alone. State Earnings Related Pension Scheme (SERPS) & any entitlement to the graduated state pension can possibly boost the state pension somewhat, but not substantially.
State pensions are a source of income that can be utilised towards a mortgage in retirement.
X
Company pension scheme members can benefit greatly with additional pension income that could be index-linked yearly & be calculated dependent upon the number of year’s service.
There is also evidence that personal pension plans can also boosting retirement income. Increasing importance is being placed in this area on seeking independent financial advice. Due to falling annuity rates it is more important to shop around & optimise your pension fund. Annuity providers can now enhance your pension income if poor health issues exist.
Both company & personal pensions are a source of income that can be utilised towards a mortgage in retirement.
X
With the recent economic downturn we have unfortunately seen the reduction in bank & building society interest rates. This has affected investors, once reliant on good interest payments, which would supplement their lifestyle. Again ensure you shop around to obtain a higher interest with your savings is more important than ever. Tax payers should make use of their annual cash ISA allowance of £5100 & non-taxpayers should ensure that Inland Revenue form ‘R85′ is completed in order they can obtain their interest paid gross.
Savings interest can be a source of income that can be utilised towards a mortgage in retirement.
X
It is also important to check whether any means tested benefits are available from the Department of Work & Pensions. Dependent upon age there may be eligibility for certain benefits such as pension credit & savings pension credit.
Income levels below £132.60pw for a single person & £202.40pw (2010-2011) jointly could allow a claim for pension credit to be made. Also, check any entitlement to council tax benefit availability, which even though it cannot help mortgage payments directly, it can lower the monthly outgoings.
If there are disability issues then depending on the condition, disability living allowance (DLA), attendance or even carers allowance may be available.
Lenders have different rules on means tested benefits - to see which qualify for a mortgage in retirement contact Equity Release Supermarket on 0800 783 9652
X
Maintaining employment through or into retirement does obviously alleviate some of the financial issues. However, experience has shown that there are difficulties in gaining employment.
Nevertheless, it is increasingly apparent that people are now looking to continue working into retirement & provide extra cash to support retirement lifestyle. If part time work can be found then it can not only assist the budget, but also the soul. People in retirement are feeling & looking younger & with more activity in retirement their average life expectancy is rising as social constraints are removed.
Employment income will only help people with existing mortgages going into retirement, but not anyone trying to obtain a mortgage in retirement. Lenders will only accept employment income if a new mortgage is to be repaid before state retirement age.
X
Secondary investment properties can provide a form of rental income which can be used towards paying a mortgage in retirement. However, if any existing buy to let mortgage is in operation this will need to be declared & considered as part of the application.
As long as a tenancy agreement is in existence then this will be considered by the lender.
X
Although not a specific means of retirement income, equity release schemes can also be considered a means of retirement support. The flexibility of drawdown equity release schemes now incorporates the use of drawdown facilities which are essential in supplementing a flexible lifestyle.
These drawdown equity release schemes provide an initial tax free capital lump sum, with an additional reserve facility that can be gradually withdrawn over future years.
Equity release lenders such as Just Retirement permit additional withdrawals in small amounts of £2,000 a time, which helps retirement planning & provides financial security for the future.
Another method of providing income from equity release is through a Home Income Plan. These equity release plans involve a combination of two products; a Home Reversion scheme & a lifetime annuity. The home reversion company purchases a percentage of the property in return for a tax free cash lump sum. The lump sum can then used to purchase the annuity which can then generate the lifetime pension income required.
Both these equity release schemes will not assist in obtaining a mortgage in retirement. However, in their own right they can provide alternative capital or income in retirement with no monthly payments.
X
As you can see there are various income sources which mortgage lenders can consider.
With recent restriction on lending criteria, it is more important than ever to obtain independent financial advice on this specialist area of retirement mortgage finance.
X
For further information & advice on mortgages in retirement, please click here for details of interest only mortgages currently available.
Alternatively please contact Mark Gregory on 0800 783 9652 or email mark@equityreleasesupermarket.co.uk
X
Tags: Add new tag, equity release, equity release schemes, Halifax, Halifax Interest Only Mortgage, Halifax Mortgage, Halifax Retirement Home Plan, Home Retirement Plan, interest only mortgage, Just Retirement, lifetime mortgages, Mortgage in retirement
Posted in Halifax Retirement Home Plan | No Comments »
Sunday, June 6th, 2010
This article provides information on the latest interest rates & changes that Aviva are making to their product range.
XX
With the current shortage of equity release lenders, additional pressures are mounting on the remaining companies providing equity release schemes.
These lenders are now experiencing larger than normal business volumes as the number of providers has dwindled over the past 12 months. As a consequence some servicing issues are of concern, of which the biggest provider is now addressing.
XX
Of these equity release companies; Aviva are the first to change their lending criteria & this post provides details of this in advance.
XX
Come the 14th June, Aviva will be increasing their interest rates & lowering their loan-to-values (LTV) & details of these changes are detailed later in this article.
This is a negative step for the market given that Aviva’s Maximum Cash Release plan offers the highest cash release in the lifetime mortgage market at present.
Therefore, clients looking for financial relief by releasing the maximum possible after this date now have a reduced cash sum available. Couple this with Aviva’s recent reduction in loan-to-values on flats & maisonette’s & there is a definite swing away from higher loan values.
XX
Aviva will now only lend on 75% of property values on flats & maisonette’s, which is a dramatic move away from lending on these abodes. Couple this with the reductions in loan-to-values which are being announced on the 14th June, means a significant shift in their lending criteria.
This will affect in particular clients looking at debt consolidation or potential other requirements that demand the maximum possible.
XX
Equity Release Supermarket as independent financial advisers have witnessed firsthand the demand for larger advances this year alone. Predominantly, this has been for debt consolidation purposes whereby clients in retirement are now experiencing income shortfall issues as their investment returns have fallen significantly.
This has resulted in financial pressures meeting these monthly liabilities including mortgage payments, personal loans or more commonly, credit card debts.
XX
Nevertheless, there are fresh signs within the market indicating that external forces are construing to develop new plans & ideas to drive this stagnant market forward.
We heard last week that More2 Life is introducing an impaired life roll-up equity release scheme. This is welcoming news for the market & hopefully the sign of things to come.
In the meantime the current crop of lenders can dictate in a market having little competition from other providers.
XX
Part of the result of this is Aviva’s impending equity release scheme changes.
XX
Aviva have announced an increase of 0.1% to the interest rates for new business on the Lifestyle Flexible Option, Lifestyle Lump Sum and Lifestyle Lump Sum Max.
Equity Release Supermarket receive an exclusive interest rate lower than that offered directly by Aviva themselves.
XX
The new Aviva interest rates wef 14th June are therefore 6.70%, 6.55% & 7.40% respectively. On paper this doesn’t represent a large percentage increase; however given the roll-up nature of these products, this will result in £1000’s difference in the future balance.
XX
Additionally, Aviva equity release are reducing the loan-to-values on the Lifestyle Lump Sum Max by 2% for customers aged 60 or below, and by 1% for those over 60.
Even with this decrease, they currently still offer the best LTV scale in the market on all properties (apart from flats & maisonettes).
XX
The LTV rates for the Lifestyle Flexible Option and Lifestyle Lump Sum will stay the same.
XX
Example LTV’s on the Lifestyle Lump Sum Max are now: -
Age 55 - 19%
Age 60 - 23%
Age 65 - 29%
Age 70 - 35%
Age 75 - 40%
Finally, there are transitional arrangements in place which anyone considering the Aviva equity release schemes should be aware of;
XX
Applications on the Lifestyle Flexible Option, Lifestyle Lump Sum and Lifestyle Lump Sum Max dated prior to 14th June and received by the 18th June will receive the old interest rates. Also, any Lifestyle Lump Sum Max applications will be on the old LTV scale.
XX
Applications on the Lifestyle Flexible Option, Lifestyle Lump Sum and Lifestyle Lump Sum Max dated before 14th June and received after 18th June will receive the new interest rate. Lifestyle Lump Sum Max applications will be on the new LTV scale.
XX
Applications dated after 14th June will receive the new interest rates. Lifestyle Lump Sum Max applications will be based on the new LTV scale.
XX
To request an Aviva illustration or further advice on any of the issues discussed above, please contact Mark Gregory on 0800 783 9652 or email mark@equityreleasesupermarket.co.uk
XX
Tags: Aviva, Aviva Lifestlye Lump Sum Max, Aviva Lifestyle Flexible option, Aviva Lifestyle Lump Sum, equity release, Equity release interest rates, equity release schemes, lifetime mortgages, loan to value, Roll up lifetime mortgage
Posted in News | No Comments »
Tuesday, May 4th, 2010
Anyone considering taking out equity release has many choices to make.
xxx
One of the biggest & most expensive if not advised correctly could be on early repayment of an equity release scheme.
However, before we delve into the main differences between current equity release schemes we briefly look at why early repayment charges exist & how they can arise.
xxx
Primarily, equity release is designed to run for the rest of your life.
xxx
There is no fixed term & the scheme will continue to run until the second person has died or moved into care.
At that point the property is usually sold, with the equity release provider being repaid first from the proceeds & any remaining balance is passed into their estate.
xxx
With the earliest age of starting one of these schemes being 55, the total term could well be in excess of 30 years. For this reason lenders hedge their bets in order to recover any potential early repayment which may cost them significantly.
xx
Obviously life expectancy for everyone differs.
xxx
The Financial Services Authority (FSA) use average life expectancy data in order to provide the basis of a lenders key facts illustration (quote).
It is with this same information that lenders will also formulate their early repayment charge structure.
We can relate such charges with a conventional mortgage, whereby upon early repayment within a specified term the borrower will incur an early repayment charge.
xxx
So, upon what circumstances would an early repayment charge exist?
xxx
This could be for a number of reasons: -
xxx
1. Sale of property
2. Inheritance
3. Death
4. Moving into long term care
xxx
However, not all the aforementioned would incur a penalty upon early repayment.
Equity release providers would not invoke a penalty on death or moving into long term care. Additionally, where some lenders invoke a charge for a set period of time, once this term has expired there would be no penalty thereafter.
However, there would potentially be a penalty if the property was sold during the lifetime of the owner for example if an inheritance was received or downsizing occurred & the scheme was repaid as a consequence.
xxx
In addition to the early repayment charge the lender could also levy an administration fee which can vary from zero to £300.
xxx
How do lenders calculate the early repayment charge & how much can it be?
xxx
The answer to this varies significantly & this can be evidence with the following simplified table: -
xxx
|
LENDER
|
TERM
|
BASIS
|
MAXIMUM CHARGE
|
|
Aviva
|
Remainder of the plan term
|
Charge linked to performance of gilts.
|
Maximum 25% initial advance
|
|
Hodge Lifetime
|
10 years
|
Percentage penalty based number of years
|
5%
|
|
Just Retirement
|
Remainder of the plan term
|
Depends on FTSE UK 15 year gilt yield
|
Maximum 20% of total advances
|
|
LV=
|
10 years
|
Percentage penalty based number of years
|
5% yrs 1 to 5, 3% yrs 6 to 10
|
xxx
As you can see, all equity release schemes have the inclusion early repayment charges & if you are considering early repayment it maybe a case of damage limitation or manipulation of repayment date that could avoid potential penalties.
From experience, this aspect of equity release penalties I will cover in a separate article to follow & can provide advice on methods of alleviating these penalties from lender to lender.
xxx
This will also include topics such as: -
- Options on downsizing
- Gilt rates & where to find current gilt yields
- Information on repayment to existing equity release borrowers who are looking for additional funds or achieve a lower interest rate
- Possible avoidance of early repayment charges - lender by lender
xxx
If you have any questions or require further information on the subject of equity release early repayment charges, please email mark@equityreleasesupermarket.co.uk or contact mark on freephone 0800 783 9652.
xxx
Tags: Aviva, early repayment charges, equity release, equity release early repayment, equity release penalties, equity release schemes, Just Retirement, lifetime mortgages, LV=, mortgage redemption, redeem mortgage
Posted in Topics | No Comments »
Monday, May 3rd, 2010
Anyone considering taking out equity release has many choices to make.
xxx
One of the biggest & most expensive if not advised correctly could be on early repayment of an equity release scheme.
However, before we delve into the main differences between current equity release schemes we briefly look at why early repayment charges exist & how they can arise.
xxxx
Primarily, equity release is designed to run for the rest of your life.
xxx
There is no fixed term & the scheme will continue to run until the second person has died or moved into care.
At that point the property is usually sold, with the equity release provider being repaid first from the proceeds & any remaining balance is passed into their estate.
xxx
With the earliest age of starting one of these schemes being 55, the total term could well be in excess of 30 years. For this reason lenders hedge their bets in order to recover any potential early repayment which may cost them significantly.
xxx
Obviously life expectancy for everyone differs.
xxx
The Financial Services Authority (FSA) use average life expectancy data in order to provide the basis of a lenders key facts illustration (quote).
It is with this same information that lenders will also formulate their early repayment charge structure.
xxx
We can relate such charges with a conventional mortgage, whereby upon early repayment within a specified term the borrower will incur an early repayment charge.
xxx
So, upon what circumstances would an early repayment charge exist?
xxx
This could be for a number of reasons: -
xxx
1. Sale of property
2. Inheritance
3. Death
4. Moving into long term care
xxx
However, not all the aforementioned would incur a penalty upon early repayment.
xxx
Equity release providers would not invoke a penalty on death or moving into long term care. Additionally, where some lenders invoke a charge for a set period of time, once this term has expired there would be no penalty thereafter.
xxx
However, there would potentially be a penalty if the property was sold during the lifetime of the owner for example if an inheritance was received or downsizing occurred & the scheme was repaid as a consequence.
xxx
In addition to the early repayment charge the lender could also levy an administration fee which can vary from zero to £300.
xxx
How do lenders calculate the early repayment charge & how much can it be?
xx
The answer to this varies significantly & this can be evidence with the following simplified table: -
xxx
|
LENDER
|
TERM
|
BASIS
|
MAXIMUM CHARGE
|
|
Aviva
|
Remainder of the plan term
|
Charge linked to performance of gilts.
|
Maximum 25% initial advance
|
|
Hodge Lifetime
|
10 years
|
Percentage penalty based number of years
|
5%
|
|
Just Retirement
|
Remainder of the plan term
|
Depends on FTSE UK 15 year gilt yield
|
Maximum 20% of total advances
|
|
LV=
|
10 years
|
Percentage penalty based number of years
|
5% yrs 1 to 5, 3% yrs 6 to 10
|
xxx
As you can see, all equity release schemes have the inclusion early repayment charges & if you are considering early repayment it maybe a case of damage limitation or manipulation of repayment date that could avoid potential penalties.
xxx
From experience, this aspect of equity release penalties I will cover in a separate article to follow & can provide advice on methods of alleviating these penalties from lender to lender
xx
This will also include topics such as: -
xxx
- Options on downsizing
- Gilt rates & where to find current gilt yields
- Information on repayment to existing equity release borrowers who are looking for additional funds or achieve a lower interest rate
- Possible avoidance of early repayment charges - lender by lender
xxx
If you have any questions or require further information on the subject of equity release early repayment charges, please email mark@equityreleasesupermarket.co.uk or contact mark on freephone 0800 783 9652.
Tags: Aviva early repayment charges, early redemption charge, early repayment charges, equity release, equity release schemes, Gilt yields, Just Retirement early repayment charges, lifetime mortgages, LV=, mortgage redemption, redeem mortgage
Posted in Uncategorized | No Comments »
Wednesday, March 31st, 2010
Andrea Rozario, chief executive of SHIP, has stated that the Government should assist in helping to raise more awareness of equity release as a real option for the retired population.
She commented on yesterdays Government white paper on elderly care, “SHIP welcomes the Health Secretary’s white paper on social care. With an ageing population and pensions failing to cover the costs of elderly social care, it is a problem that does, and will affect us all and needs to be addressed urgently”.
Equity Release schemes therefore can have an important part to play.
A vast majority of homeowners now realize their home is their most valuable asset and equity release could be a serious consideration in assisting financial planning into retirement.
In addition…
“The current system sometimes places elderly people in the position where they must sell their home to pay for long-term care that they may require. By limiting the number of years that the elderly will have to pay for residential care to just two, the suggestions in the white paper may be a step towards combating this problem.”
For further advice on how lifetime mortgages or home reversion schemes can assist with care & retirement planning issues please contact Mark Gregory on 0800 783 9652 or
e: mark@equityreleasesupermarket.co.uk
w: http://www.equityreleasesupermarket.co.uk
Tags: equity release, equity release schemes, government white paper, home reversion, lifetime mortgages
Posted in News | No Comments »
Sunday, March 21st, 2010
The simple answer to this question is YES.
However, there needs to be an understanding of what type of Power Of Attorney (POA) is in force, when it was taken out & whether the Court of Protection have been involved in registering the document.
Prior to 1st October 2007, an Enduring Power of Attorney (EPA) was the registration document that was put in place to manage the affairs of someone who was lacking in mental capacity. This could be placed in operation prior to any onset of any incapacity with the permission of the party concerned.
Post incapacity, if no EPA was in place it could take months to get the Court of Protection to issue a POA, thus delaying any potential equity release plan.
However, since 1st October 2007 it is no longer possible to create a new Enduring Power of Attorney as EPA’s have since been replaced by Lasting Power of Attorney’s (LPA’s).
Nevertheless, if a valid EPA was already in place it needn’t be revoked & replaced with a new LPA, unless there was a wish to change the appointment of the Attorney.
So what is a Lasting Power of Attorney?
Lasting Powers Of Attorney are legal documents that authorise someone whom you trust to make decisions on your behalf. This includes aspects of your life such as your property and affairs or personal welfare. This would be in place for such time in the future when you may lack the mental capacity to make those decisions yourself. An LPA has to be registered with the Office of the Public Guardian before it can be used.
Two forms of LPA exist; one is a Property and Affairs LPA and the other is a Personal Welfare LPA. The person or persons you appoint to act for you are called your Attorneys. It is paramount that you take extreme care when deciding on the appointment of your Attorney. You need to be confident that your Attorney will act in your best interests and that they will be able, and have the time, to carry out the tasks involved.
Where Does Equity Release Fit In?
As you can see the implications vary as to whether the POA is pre or post 2007 & whether the Court of Protection has been involved.
Starting with pre 2007 POA’s, equity release lenders will accept Enduring Power of Attorneys as long as they have been registered with the Court of Protection. They will need sight of the original document or a certified copy signed in original ink by the solicitor on each page.
Depending on the reasons for the equity release, some lenders may need further evidence of the purposes of the release.
There may be many reasons for capital requirements;
- Meet expense costs so that one can remain in the home
- Cover care cost issues at home including nursing & restbite care costs
- Home adaptations - alterations to the home to improve motability
- Repay costs incurred by family support
The list of reasons for releasing equity are many, but from experience the aforementioned are the main issues in relation to power of attorneys & equity release.
So How Do Lenders View An Equity Release Application & What Are Their Requirements?
This will depend on the use of the funds as detailed above. If the lender can see the requirements of the equity release are for the direct benefit of the beneficiary then there should be no issue with most lenders.
However, occasionally some lenders may ask for further proof of the use of funds & may therefore ask the POA to obtain written court approval & require evidence of this. Obviously, this can cause further delay & possible additional costs, thus delaying the equity release application.
However from experience, companies such as LV= are not as stringent & as long as the conditions are met regarding POA registration & solicitor verification, then acceptance should be fine.
This will vary from case to case & therefore it would be advisable to contact Equity Release Supermarket who can research individual cases on your behalf & find a suitable lender.
Regarding application, the POA will need to sign the equity release application form & associated documents required by the adviser. The lender will also need to evidence the original or solicitor certified copy of the Power of Attorney document. The remainder of the application stages will follow the normal equity release underwriting process through to completion & release of funds.
It is therefore recommended that older citizens give further thought to what could happen to their finances if they lose their mental capacity.
It now becomes apparent why equity release schemes can play an essential role in funding such issues with care in the home & expenses met by remaining in situ by their own, or children’s wishes.
For any enquiries on Power Of Attorney’s or any issues discussed above, please contact Mark Gregory at Equity Release Supermarket on 0800 783 9652 or email mark@equityreleasesupermarket.co.uk
Tags: court of protection, enduring power of attorney, equity release, equity release schemes, lasting power of attorney, lifetime mortgages, LV=, power of attorney, solicitors
Posted in Topics | No Comments »
Thursday, March 11th, 2010
Stonehaven, the innovative equity release lender that sourced its funding from Santander is the latest provider to withdraw from the lifetime mortgage market.
Stonehaven have now become one of many finance houses to pull back from the sector & whom say the move is hopefully only temporary & may return to the market when funding improves.
After the shock withdrawal of Prudential at the end of 2009, Stonehaven was one of only a number of remaining providers including Just Retirement, Aviva & LV= who expressed commitment to the sector.
Georgina Smith, sales and marketing director at Stonehaven, said it has been forced to suspend lending after banking giant Santander, decided it no longer wanted to fund the equity release mortgages.
Georgina stated “We are in discussion with a number of potential lenders and we do hope to start lending again in the near future. We believe in equity release as a product,”
Stonehaven’s existing lifetime mortgage customers will not be affected with continued good servicing & they have pledged to meet all the existing terms and conditions
Stonehaven have placed deadlines on existing business applications based on KFIs generated before 10th March 2010.
New applications, supported by relevant Key Facts Illustration must be received by close of business on Wednesday 7th April 2010. Applications must include a cheque to cover the valuation fee.
Thereafter, offers made by Stonehaven are normally valid for a period 3 months; however they are extending this deadline to 6 months from the valuation date
We look forward to their return.
Mark Gregory CeMap CeRER
0800 783 9652
mark@equityreleasesupermarket.co.uk
Tags: Aviva, equity release, equity release schemes, Just Retirement, lifetime mortgages, LV=, Stonehaven
Posted in News | No Comments »
Sunday, February 7th, 2010
Although many pensioners are eligible for a mortgage in retirement, many are not even considering this as an option, or even aware they could apply for one.
Equity release can be a final solution for borrowing in retirement once all other potential avenues of capital raising have been explored, however equity release can be expensive & sold all too quickly without looking at the alternatives.
It is a common misrepresentation that just because people are near to, or in retirement, that they cannot raise funds via a conventional mortgage.
This is grossly incorrect.
As part of any capital raising initiative, all options must be considered & eliminated as necessary upon discussion between client & adviser. By ascertaining disposable income & the clients future intentions with regards to their property, occupation & selected retirement date the adviser can provide recommendations accordingly.
There are two ways that lenders will look at potential mortgage cases: - pre retirement & post retirement income: -
Should one still be working, most lenders will consider employment income only up to a maximum age of 65. The amount that could be borrowed would be based on a multiple of income which varies from lender to lender. It can also be based on affordability, taking into account gross incomes & making deductions for any loans, credit cards or other outstanding debt.
However, how does this affect people considering working beyond normal retirement age of 65?
Not to worry, as there are still a few lenders that would permit this & this is where specialist independent mortgage advice should be sought.
For example Leeds Building Society will take into account current employment income into retirement should they be aged under 60, regardless of the normal state pension age.
Leeds will actually permit the mortgage term to extend into retirement upto a maximum age of 85.
It must be stressed to the client however that payments must be maintained & this could be difficult should employment cease prior to the end of the selected mortgage term.
However, for some this could certainly be an option should their future pension income still be substantial.
For many lenders though, should the mortgage term extend beyond age 65, then only post retirement income will be considered.
This could be income such as a state pension, company & private pensions, investment income etc not reliant on employment.
However, due to the lower levels of income at retirement age, this would result in reduced borrowing power into retirement & consequently smaller mortgages.
Dependent upon age, the mortgage term would be determined by the maximum age at expiry of the mortgage. Again, many lenders cautiously use 75 as the maximum expiry age. Should the lender only permit a capital & repayment mortgage, due to the short term this could be expensive.
Therefore, an interest only mortgage could be an alternative if the loan to value is below 75%.
Again, access to specialist advice can result in finding lenders that can potential lend beyond age 75 & also on an interest only mortgage basis.
Should adequate pension provision have been made, then lenders acknowledging this are available & will lend beyond age 75.
Leeds Building Society, Godiva & Halifax’s Retirement Home Plan will fit the bill here.
All three will lend to a minimum age of 85 & in the case of Halifax they will extend to a term of 40 years; more than sufficient for most!
Therefore, before rushing into borrowing in retirement, bear in mind that yes, equity release is an option, howoever is it the best option for everyone?
Probably not & as surprisingly advised to some of my retired clients, (pleasing most as a result) they could be too YOUNG for an equity release!
Therefore, consider the affordability of a mortgage first, as it could be a lot less costly for your beneficiaries than an equity release plan.
For further details on mortgages in retirement & to check eligibility please contact Mark on 0800 783 9652 or email mark@equityreleasesupermarket.co.uk
Tags: Add new tag, Coventry Building Society, equity release, Godiva mortgage, Halifax Home Retirement Plan, Home Retirement Plan, interest only mortgage, Leeds Building Society, lifetime mortgages
Posted in Halifax Retirement Home Plan | No Comments »
|
