Posts Tagged ‘lifetime mortgages’
Tuesday, December 14th, 2010
Do you need extra more money during your retirement?
If the answer is yes, then equity release can be an ideal solution. Today, many equity release companies exist who provide different mortgage schemes to homeowners who are above 55 years of age. By opting for these schemes, you can release equity or money against the value of your home. Before taking a final decision, it is important to consider few factors. These include:
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Flexibility – You have to check how flexible your equity release plan is. Choose the scheme which allows you to draw more money or allows you to sell the property, if required. There are lenders who also allow the applicant to make ad-hoc repayments off the balance (subject to early repayment charges)
Fees – The fees for purchasing equity release schemes depend on the provider. Consideration should be given to the plan whose fees are the lowest. Nevertheless, this shouldn’t be classed as the over riding factor. Special offers such as cashbacks, free valuations all help to keep the costs down. Check with Equity Release Supermarket to see what offers they can find you.
Interest rates – Similar to fees, the interest can vary on the basis of the scheme or mortgage chosen. Before choosing, it is recommended to compare the interest rates of different schemes. Rates currently can vary from as low as 6.59% up to 7.59% & this can have a massive effect on the final balance at the end of the day. Always check aswell that the interest rate being quoted is annual. Some equity release companies quote on a monthly & some annual basis. A monthly interest rate of 6.59% is actually higher than an annual interest rate of 6.59%, due to the quicker compounding effect of monthly v annual interest.
S.H.I.P (Safe Home Income Plans) – This is an organisation which was set up to protect the rights of consumers or purchasers of home equity schemes. Whichever scheme you choose, ensure that the lender is a member of this organisation. As a result of using a ship equity release company, means that the solicitor will have to sign a SHIP certificate to say that they have acted on the clients behalf & they understand what they are entering into. Additionally, being a member of SHIP means the scheme has to meet certain criteria – to be able to be repaid; to be able to move house & inlcude a no negative equity release guarantee.
Financial Services Authority (FSA) – The FSA is a regulatory body in the UK which takes care of the rules and regulations followed by the financial companies. Always choose a company which is registered with the FSA thus affording the protection the FSA provide.
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It is advisable to hire a qualified financial consultant before investing in any one of the equity release schemes currently available in the market.
Equity Release Supermarket have experienced advisers who can source the whole of the market to find the best equity release deal for you.
Call freephone 0800 783 9652 or email mark@equityreleasesupermarket to discuss your requirements further.
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Tags: equity release, equity release advisers, equity release schemes, Fees, FSA, interest rates, lifetime mortgage schemes, lifetime mortgages, SHIP
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Monday, December 13th, 2010
An increase in the standard of living has caused a shortfall in pension provision. This has affected the individuals who are on the verge of their retirement. An equity release scheme can be a solution for this problem. The following are some of the important aspects of equity release schemes:
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What is an equity release scheme?
Equity release schemes allow you to release the equity in your home. Such schemes are already immensely popular among the individuals in their retirement. They can thus cover the shortfall in their income by getting more value for their homes.
Several pensioners as well as their children consider equity release as a good option. Such schemes provide them with a steady flow of cash in their retirement days. They can thus maintain as well as improve their quality of life in their retirement.
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Equity release schemes
Equity release is basically a term used to cover different financial products that release home equity. However, the individuals do not need to meet any monthly payment. Keep in mind that equity release schemes can only be purchased by individuals above the age of 55 years.
Equity release products are divided into two broad categories as follows:
Out of these two options, a lifetime mortgage is popular among most retired individuals. Sometimes, the lifetime mortgage providers provide a lump sum amount which is decided on the basis of the individual’s age and value of the property. This amount can also be given as an ongoing monthly amount.
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The following are some of the other benefits of opting for equity release
- Fixed rate of interest for life and no monthly payment
- Mortgage can be transferred to a new property (subject to property criteria & valuation)
- Plans can be repaid at anytime (subject to potential early repayment charges)
Thus, equity release schemes hold the key to an improved lifestyle post-retirement.
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Hopefully equity release solutions exist for you. Please call freephone 0800 783 9652 to chat to one of our friendly equity release advisers.
Tags: equity release, Equity Release Adviser, equity release schemes, lifetime mortgage schemes, lifetime mortgages
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Wednesday, December 8th, 2010
Today, equity release schemes are preferred by many people because they help unlock money against the value of their homes. If you are 55 years of age or older and facing financial constraints then you should consider equity release schemes. They are specifically designed for older people who own their own home and seek to live a better life.
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How do equity release schemes work?
With the help of these schemes, you can obtain 15% to 50% of the value of your property. To qualify for equity release, you must also have no or very little outstanding debts. If you have any secured debts then they must be fully repaid, either before or actually on completion. In exchange for a value of your property, the lenders will pay you a lump sum amount of money or a monthly payment.
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Two different types of equity release scheme
To fulfill different needs, two different types of equity release schemes have been introduced. These include lifetime mortgages and home reversion plans.
If you choose a lifetime mortgage, you can receive a lump sum amount of cash against your property. The best thing about this scheme is that the repayment is made when the homeowner dies or moves to a care home. Today, different types of lifetime mortgages have been introduced by different financial institutions.
Home reversion plans allow you to sell a part or all of your property in exchange for a cash payment. You will receive a lifetime tenancy agreement & have no rent to pay for the rest of your life.
All equity release schemes we advise on are regulated by the FSA (Financial Services Authority) & are members of SHIP (Safe Home Income Plans).
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To establish which of the two lifetime mortgage schemes are suitable for your requirements, contact the Equity Release Supermarket team on 0800 783 9652.
Tags: equity release, equity release schemes, home reversion, home reversion schemes, lifetime mortgage schemes, lifetime mortgages
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Wednesday, December 1st, 2010
On a daily basis we get serious financial queries from people looking to alleviate their money woes in retirement. This could be due to a number of lifestyle issues,; perhaps due to a lack of pension provision over the years, divorce, business failure, the list is endless.
However, to all these scenarios equity release can potentially be a saviour in one way or another. This is why it is so important that advice from a qualified equity release adviser is sourced.
From an equity release advisers point of view it gives us most pleasure to see how life changing equity release schemes can be to clients & the benefits they bring.
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Equity release is specifically designed for homeowners who want to release capital against their homes. If you have a situation that requires a capital lump sum to resolve the cash flow problem, then equity release schemes may be the solution.
However, which is the right equity release depends upon your requirements & attitude towards your beneficiaries.
In general, all equity release schemes will provide some form of tax free lump sum, but it is the method of its withdrawal that will determine the most appropriate equity release scheme that is correct for you.
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Criteria to qualify for equity release
If you want to opt for equity release then the youngest age of the homeowners must be over 55 years of age. In addition to this, your main residence must be worth a minimum of £60,000 & if any secured debts are outstanding on the property, then they must be repaid at completion of the new equity release plan. Therefore, unless there are savings to cover the repayment of the mortgage, then sufficient funds need to be raised on the new equity release plan to redeem the existing mortgage.
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How much equity can you release?
The cash lump sum received depends on various factors. These include your age, the value and your health situation. The scheme you choose can also affect the amount of receivable money. The older the age of the applicant, the greater the potential equity release available. The higher releases are often found on home reversion schemes which is where you sell a percentage of the property to the home reversion company.
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Is the money tax-free?
Yes, the lump sum money which you will receive against your home will be tax-free as it is classed as a withdrawal of capital. However, what happens to these monies next will determine whether these equity release funds remain tax free.
Once, the tax free lump sum is received from the solicitor & placed into the clients bank account, then if you are a basic rate taxpayer or higher, then you will be taxed at source on the interest generated. If you are a non-taxpayer then remember to have Inland Revenue form R85 completed, which will allow the bank or building society to pay interest with NO tax deducted.
The fact the equity release cash lump sum is tax free on receipt means that the funds should go further long term & allows you to spend the cash in various ways. The list for this is endless but most popular prove to be debt consildation, home improvements, buying a new car or go on a holiday or pay off outstanding debts.
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Will you own the property?
If you have opted for a lifetime mortgage scheme, then the property will still be 100% yours, albeit the equity release company will have placed a legal charge on the property & lodged it with the land registry. This protects the provider in that when the property is eventually sold, they will have first bite of the cherry & recieve the original cpaital borrowed, plus compounded interest to that date.
In the case of home reversion plans, the whole or a part of your property will be owned by the lender. Therefore, dependent on how much of an equity release cash lump sum is required, will determine the percentage of the property that needs to be sold. This could be as little as 10% or even as much as 100% of the total property value. Obviously, if 100% of the property is sold then you will forfeit certain rights. These would include there being NO inheritance to pass onto any potential heirs, no equity to negotiate on if you want to upgrade to another property & you will require the home reversion company to approve any building work or changes to the property you require.
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Please think carefully before entering into any long term equity release mortgage arrangement. The equity release market is highly regulated by the financial services authority (FSA) with advise not only coming from an mortgage specialist such as Equity Release Supemarket, but also from a legal representative which will ultimately by your solicitor.
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To discuss your equity release options further & to request a free initial NO obligation financial planning service meeting, then contact the Supermarket team on 0800 783 9652 or email admin@equityreleasesupermarket.co.uk
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Tags: equity release, Equity Release Adviser, equity release schemes, home reversion, home reversion schemes, impaired life, lifetime mortgage schemes, lifetime mortgages, Roll up lifetime mortgage, SHIP
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Tuesday, November 30th, 2010
There are many retired people who cannot find th quality of life they yearn for on the limited savings and small pensions they have. If you are suffering from financial difficulties then equity release can be the perfect solution for you. Equity release allows you to unlock money against the value of your home.
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How does equity release work?
To qualify for equity release, you must be above 55 years old and own a home which is worth more than £60,000. Once you have opted for equity release, you will receive a lump sum amount of money or monthly income from the lender.
If you have decided to go for equity release then you must know that there are two different equity release schemes in the market.
Lifetime mortgages – These schemes are preferred by many homeowners these days because they can be provided in different formats to suit people’s circumstances. The different types of lifetime mortgages range from lump sum equity release to the flexible drawdown equity release schemes. The lump sum plans do as the name says on the tin, in that they provide a single, one-off lump sum which is fine if no further cash releases are required.
However, this can be difficult to predict & when interest rates for the lump sum & drawdown are the same then invariably the drawdown plans are the most popular equity release schemes available.
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Home reversion plans – These equity release schemes allow you to sell the whole or only a percentage of your home to the home reversion lender. This means that you have the option to also keep some part of the property for your beneficiaries. These are the only type of equity release schemes that can guarantee an inheritance for your beneficiaries.
Both the above mentioned equity release schemes are regulated by SHIP (Safe Home Income Plans) and the FSA (Financial Service Authority). These organisations ensure that all the applicants get the protection that equity release UK schemes should receive in getting the appropriate deal for your circumstances.
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To ascertain which or how either of the aforementioned equity release schemes can benefit you, please contact Mark Gregory on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk
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Tags: Add new tag, drawdown, drawdown equity release, equity release, equity release schemes, home reversion, home reversion schemes, inheritance protection, lifetime mortgage schemes, lifetime mortgages, SHIP
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Monday, November 29th, 2010
Equity release is a scheme which is designed to assist retired homeowners release some money against the value of their homes. If you find it difficult to live with small pension, possibly even benefits and little savings then equity release is an ideal option for you. Once you have opted for equity release then the eventual repayment will be done after your death or when you move to long term care. This is the time at which beneficiaries will be in receipt of their inheritance.
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Today, two different types of equity release schemes have been introduced to the market. These include home reversion plans and roll-up lifetime mortgages.
Many homeowners opt for lifetime mortgages because they offer great benefits.
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Two types of lifetime mortgages: -
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Roll-up lifetime mortgages – These equity release schemes are specially designed for those who want to release equity without paying monthly repayments. The amount that can be released is based on the age of the youngest applicant & the property value.
The younger the age, the lower the equity release sum that can be released. The reason for this is down to life expectancy, as lenders do not want to release too much at a younger age due to the roll-up of interest. With average life expectancy of a 60 year old now reaching beyond 80, lenders must err on the side of caution. The reason being that they do not want the equity release balance to reach beyond the property value in the future. This would cost them dearly as the no negative equity guarantee would then need to be invoked.
The mechanics of the roll-up lifetime mortgage means that the interest will be compounded monthly or annually & re paid eventually along with the original capital on the eventual sale of the property. Another important feature of these equity release schemes are that they allow you to maintain 100% ownership of the property.
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Interest only mortgages – This is one of the unique schemes which allow homeowners to release equity and repay monthly interest only. This means that the monthly repayment must be affordable on their retirement incomes. Such equity release schemes such as the Halifax Retirement Home Plan are few & far between as there are not many mortgage or equity release companies that offer finance to the over 65 age group.
Nevertheless, Equity Release Supermarket have unique access to such schemes & their team of friendly equity release advisers can identify which is the most suitable scheme dependent on your personal circumstances.
Interest only mortgages such as those offered by Halifax, will maintain the same balance from start to finish & therefore can guarantee how much of your estate will be required to settle with the lender at the end of the term. The balance will only be repaid after your death by selling the property. This will be carried out by the nominated executors who have been appointed in your Wills.
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If you have a question on whether a roll-up or interest only mortgagee is right for you contact the Equity Release team free on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk.
Tags: equity release, Equity Release Adviser, equity release schemes, Halifax Retirement Home Plan, home reversion, lifetime mortgage schemes, lifetime mortgages, No negative equity guarantee, Roll up lifetime mortgage
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Friday, November 19th, 2010
Lower pension incomes and high living costs have resulted in retired people looking for different financial solutions to make ends meet.
Due to these issues, more and more retired homeowners are turning to equity release schemes for an additional source of income. Equity release allow homeowners to use some of the cash tied up in their homes and get a tax free lump sum. They are also permitted to continue living there rent free & in the case of lifetime mortgages with 100% ownership to.
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Additionally there are other advantages gained from equity release schemes.
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- No need to move – One of the best things about equity release schemes is that homeowners do not have to worry about moving out of their homes when they sign up. In the case of roll-up lifetime mortgages the plan holder retains 100% ownership of the property & can remain there until the second person has died or moved into long term care. With regards to the second type of equity release – home reversion plans, the planholder retains the portion of the property they do not sell to the reversion company.
- Inheritance protected equity release products – Another benefit of these schemes is that homeowners can now choose whether or not they want to guarantee a certain percentage of their home. This means that they can still be sure there is some equity left for their beneficiaries. This can therefore form part of a gift of their inheritance.
- Supplementary income – More than 50% of retired homeowners have wealth that is tied up in their property. For this reason, many choose home equity release schemes to gain additional income. This retired people to meet daily expenses & assist with the day to day costs of living in today’s retired environment.
- In all cases, homeowners can move home during the term of their equity release schemes. However, they have to notify the equity release company. The reason for notification to the lender is that the equity release planholder has two choices. Firstly, they have the option of porting the equity release scheme over to their new property. The new property would have to meet the lenders property criteria, however it can be transferred with no early repayment penalty. Secondly, the scheme can be repaid in full, thuis removing any future equity release liability. You would therefore need to bear in mind any potnetial early repayment charges.
As equity release schemes can be rather complex, it is best to have a professional explain and oversee the process. All Equity Release Supermarket advisers are authorised by the FSA & the equity release schemes they advise on are all SHIP members.
The Equity Release team will provide independent financial advice & research from the whole of the equity release market.
To gain from their experience, please call freephone 0800 678 5159 or email mark@equityreleasesupermarket.co.uk
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Tags: equity release, Equity Release Adviser, equity release schemes, home reversion, home reversion schemes, inheritance protection, lifetime mortgage schemes, lifetime mortgages, Roll up lifetime mortgage
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Tuesday, November 9th, 2010
The current economic situation has forced everyone to look for different ways to raise money.
Equity release schemes are one option available to enjoy the fruits of retirement in a way many would never have envisaged.
Some people are still unaware of equity release schemes and their numerous benefits; here we aim to address those issues.
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Maintain standard of living
Immediately upon retirement, there is an evident drop in income. Unfortunately expenses do not.
You may think that saved money during your working life will be adequate for you to live comfortably. Rising inflation & lack of confidence in pension plans might make this difficult.
There are other options to consider & one of these maybe to downsizing to a smaller home. Other options available prior to considering equity release would be using any savings, asking relatives for financial assistance, claim any benefits due or if you have a good disposable income there is still the option of an interest only mortgage. The Halifax Retirement Home Plan can assist here.
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If you look into equity release schemes, you will notice that you do not have to sell your property. Therefore, you can remain at the property for the rest of your life.
Applying for equity release, enables you to obtain some of the cash value of your property and with a roll-up lifetime mortgage you still remain the owner. This way, you can maintain your standard of living and can avoid the hassle of moving into another house.
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Fulfil your needs
Additional cash can help retired individuals to fulfil basic needs as well as allowing them to pursue leisure activities. You may want to clear some debts, go on a long holiday, buy a new house or simply develop new hobbies. Equity release schemes can help you with these things.
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The age factor
Age is an important factor when buying an equity release scheme. Your age is directly related to the amount of cash you can get. The older you are, the more you can get. Lifetime mortgage schemes start at age 55 with a maximum release of 20% & run beyond age 90 releasing over 50%.
Home reversion schemes start at age 65 & again go past age 90 with the maximum release being the sale of 100% of your property to the home reversion provider.
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No limitations on spending
A good thing about equity release schemes is that you can spend the money the way you want to and there are no restrictions. We would only advocate initially taking an amount which you are likely to require in the first 12 months. The reason for this is that drawdown equity release schemes allow you to take the equity release cash in stages rather than all at once. This ensures that you pay less interest in the long run as you only pay interest on the actual amount you have withdrawn.
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Tax-free cash
The cash you receive from the scheme is free of income tax. However, if any funds are placed on deposit then you could pay tax on any interest gained.
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To find out whether equity release is suitable for you why not have a free initial consultation with one of our qualified equity release advisers. Call now on freephone 0800 678 5159.
Alternatively, email admin@equityreleasesupermarket.co.uk.
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Website – http:///www.equityreleasesupermarket.co.uk
Tags: equity release, Equity Release Adviser, equity release schemes, Halifax, Halifax Retirement Home Plan, home reversion, home reversion schemes, lifetime mortgages
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Tuesday, October 26th, 2010
Planning for your retirement in essence should start in your earlier years; however as we know life unfortunately doesn’t always go to plan!
Here we discuss the merits of the niche interest only mortgage product; the Halifax Retirement Home Plan which is becoming an increasingly popular way of providing mortgages for pensioners.
Since writing my original article on the Halifax Equity Release plan (click here to view), interest has certainly been escalating. The main reason being that people in retirement are unaware of their mortgage options once they finish work. But life must go on.
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What is the history of the scheme?
Established in 1984, the Halifax Retirement Home Plan was initially available through the Halifax branch network and was developed to provide low cost mortgage finance for the retired & elderly.
However, under the Financial Services Authority review of the lifetime mortgage market in 2006, Halifax withdrew the branch license to offer lifetime mortgage advice.
Therefore, the responsibility for providing advice on the Halifax Retirement Home Plan was left completely with lifetime mortgage qualified advisers including independent specialists Equity Release Supermarket.
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So what is the Halifax Retirement Home Plan?
In simple terms the scheme is an interest only mortgage for people who are retired & facilitates the release of equity tied up in the property. The release of funds can be for almost any purpose including:-
- debt consolidation including paying off credit cards/loans or mortgages
- holidays including cruises or just day trips
- replacement car or caravan
- home improvements
- gifts to the children providing a deposit for house purchase
- supporting your lifestyle through retirement.
Qualification for the Halifax equity release scheme is based on income. Halifax will only accept non-earned income & this must be in the form of: -
- Occupational pensions
- Private pensions such as personal pensions or retirement annuities
- State pensions
- State benefits including pension credits & disability benefits
The stated minimum age for the Halifax Retirement Home Plan is 65. However, as long as there is no earned income & justification for the size of the mortgage can be based solely on the above income, then ages lower than 65 can be achieved.
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How much can be released?
The minimum release on the Halifax Retirement Home Plan is only £15,000. However, to establish the maximum release possible would require the use of an affordability calculator.
Halifax does not base the size of release on a multiple of income, but whether the interest only mortgage can be afforded through retirement.
The data Halifax requires for this calculation includes income, credit status, number of applicants & credit commitments outstanding after the new mortgage commences.
This procedure can be carried out by qualified advisers such as Equity Release Supermarket & is an accurate assessment of the potential borrowings on this scheme.
The overall maximum release available can never be more than 75% of the valuation of the property. Therefore, should the affordability calculator show a figure greater than this, it will still be capped at 75% of the property value.
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Does Halifax require a repayment vehicle?
The answer to this is NO.
As the Halifax Retirement Home Plan is an interest only mortgage for pensioners, no form of repayment is required.
In contrast, the mainstream mortgage market is actually tightening its grip on new interest only mortgages, whereas this Halifax equity release scheme will still accept repayment by virtue of the eventual sale of the property. This would be on death of the surviving partner, moving into long term care or earlier property sale.
The term allocated to the Halifax home retirement plan is 40 years which should provide ample time for it to run for the rest of one’s life! This removes any concern about having to find the funds to pay off the Halifax scheme during your lifetime.
Most mortgage providers will only accept a mortgage term upto age 70-75 or in rare instances age 85. However, this only buys time as eventual repayment would be required. However, this scenario may still be suitable should one be downsizing at a predetermined date in the future.
The Halifax Retirement Home Plan therefore removes any element of capital repayment risk.
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So what interest rates & products are available?
Dependent upon whether you are a new or existing Halifax customer will determine the interest rates & products applicable.
Currently, the better deals are offered to new customers as they have access to the whole mainstream Halifax product range. This is a great advantage, as there is full access to current low rate tracker & fixed rate products. Click here for the latest interest only mortgage rates…
These include deals such as the current 2 year tracker rate at just 2.59%. Based on borrowing £50,000 this currently would only cost £107.92pm (3.6% APR).
Additionally, if remortgaging from another lender then there is the benefit of a free valuation & free standard legal fees, which reduces the set up costs significantly. I have experienced clients who have just £800 outstanding on a mortgage or even documents kept in deed store that qualified for this free remortgage package!
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What if I already have a Halifax mortgage?
The good news is you can still apply for the Halifax Retirement Home Plan. However, the situation here requires completely different advice & procedure. Should you wish to merely transfer onto the Retirement Home Plan then you can port over your existing rate which can be good news if on a standard variable rate. However, if you wish for additional borrowing then the process becomes a little more complicated.
The product range for existing Halifax customers is rather sparse & with the best deals starting currently at 4.99% fixed, hence there is a distinct advantage for new customers.
Such applications will be paper based & therefore processed manually which involves more human input. Experience has shown this results in a different underwriting approach to the process undertaken on new applications.
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Can I pay off the Halifax Retirement mortgage early?
The simple answer to this is YES.
Unlike equity release plans where penalties can potentially apply for the rest of your life, the Halifax interest only mortgage will only have early repayment charges for the initial product term. Therefore, should you have opted for the 2.59% 2 year tracker product discussed previously, the penalties would only apply for the first 2 years. After, this 2 year period the mortgage would then revert to the Halifax standard variable rate, currently 3.5%.
However, before the initial rate expires you will have the option to take out a new product from the Halifax mortgage range available at that time.
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So what is the advantage of the Halifax Retirement Home Plan over an equity release scheme?
The obvious answer to this is the fact that the Halifax mortgage is interest only & therefore requires a monthly payment of interest. The balance will always remain the same throughout the term of the plan. E.g. borrowing £50,000 today, will result in £50,000 requiring repayment once the house is sold.
In contrast, equity release schemes do not require any monthly repayment & therefore the balance will increase over time. Roughly speaking the balance of equity release schemes will double every 10/11 years.
From a beneficiary’s point of view, the Halifax interest only mortgage will guarantee an inheritance, as the final balance of the mortgage will always be known. This would be favourable for people who want to ensure the children definitely receive an entitlement to their parent’s inheritance.
With all this information & options available it is more important than ever to receive specialist advice to obtain the best deal for your personal circumstances.
Equity Release Supermarket can provide independent advice on both equity release schemes & interest only mortgages for pensioners.
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For further information or to request a quotation, please ring Mark on 0800 783 9652 or email mark@equityreleasesupermarket.co.uk.
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Tags: Halifax, Halifax Home Retirement Plan, Halifax Retirement Home Plan, interest only mortgage, interest only mortgages in retirement, lifetime mortgage schemes, lifetime mortgages, mortgages for pensioners, pensioner mortgages, retirement mortgages
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Thursday, October 14th, 2010
Signs that the equity release market is beginning to spark into life again, can be evidenced by the re-emergence of a former lender in the market.
more2life have joined forces with annuity specialist Partnership assurance to re-launch their impaired life roll-up lifetime mortgage plan.
Incorporating an impaired life facility & protected equity guarantee, the more2life equity release plan can be seen to be opening a niche market for itself. The impaired life facility means that depending on health & lifestyle, a higher than normal tax free lump sum can be achieved, should serious health issues be present.
The more2life equity release plan has been designed with three scenario’s in mind: -
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- Enhanced plus – industry leading maximum release, impaired life product
- Enhanced protected – impaired life plan with ‘protected equity guarantee’
- Protected plan – older applicants looking for a ‘protected equity guarantee’
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Pitching the enhanced plus plan at the maximum release end of the market means that should the applicant qualify on medical grounds, they would have the highest equity release lump sum currently available. This would even surpass the current Aviva Lump Sum Max product, although this would be at the expense of a higher interest rate with more2life.
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The following percentages are the maximum releases available on the Enhanced Plus: -
Age 55 23%
Age 60 28%
Age 65 33%
Age 70 38%
Age 80 48%
Age 90+ 54%
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For example, an applicant aged 65 with a property valuation of £250,000 & meeting the underwriting criteria, can release a maximum of £82,500 on the enhanced plus plan.
The interest rate for this product will be 7.49% monthly.
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The second product – ‘enhanced protected plan‘ is also based on health & lifestyle grounds & again can provide an enhanced lump sum. However, to qualify for this equity release scheme the health situation will not be a serious as the enhanced plus. The interest rate for this plan is lower at 6.99% monthly.
Another feature of this plan is the ‘protected equity guarantee’ which is included & guarantees a percentage of the property for the children/beneficiaries on the eventual sale of the property.
The guarantee works as follows: -
Should the overall facility available be £80,000, yet only £40,000 is taken, then 50% of the final sale value will be protected on sale.
This can be an essential tool for applicants who wish to ensure that a guaranteed inheritance is passed onto their children.
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The final option is the ‘protected plan’ which has no impaired life facility , but does include the protected equity guarantee. The interest rate is the same as the enhanced protected at 6.99% monthly.
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In summary, depending on whether the maximum lump sum is being sourced, or one is looking to take equity release but still guaranteeing an inheritance for their children, then one of the three more2life equity release schemes can benefit.
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If any of these more2life plans would be of interest to you, please ring the Equity Release Supermarket team on 0800 783 9652 or email mark@equityreleasesupermarket.co.uk
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To request a quote on the more2life enhanced plans please click here.
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Tags: equity release, equity release schemes, impaired life, inheritance protection, lifetime mortgages, maximum lump sum, more2life, protected equity guarantee, Roll up lifetime mortgage
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