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Are you Releasing the Potential from your Retirement Apartment?

Sunday, October 20th, 2013

Releasing equity on a retirement apartmentWith an ever increasing ageing population, more and more retired homeowners find that their properties are becoming too big to live in. In conjunction with this another significant financial burden is the ever increasing energy costs associated with heating larger properties.


This could mean that they make a choice whether to ‘eat or heat’.  An old cliché yes, but a very apt and true one.


Specialist housing, or retirement apartments have been around for more than 30 years and just 1% of over 60’s are estimated to live in these types of properties.  For most, moving to a retirement property can ease the pressure of excessive bills, plus give a new lease of life and community spirit.


For others though, a retirement apartment could be seen as not being financially prudent or comes with some uncertainty for a number of reasons:

  1. Location: Specialist retirement apartments may be more expensive than the value of your own home.
  2. Service charges: These are payable annually, and in line with inflation, they tend to be an increasing sum.
  3. Pension income: May suddenly be reduced upon the demise of an occupier.

If you already live in a retirement apartment, you may have the concern that with increasing costs and service charges, you may not be able to maintain your cost of living, and have the worry of potentially needing to sell.


Did you know however, that there could be a solution?


As an Equity Release Specialist, I have over the last 12 years been able to provide homeowners with an alternate way of being able to purchase a retirement apartment or to raise funds to cover on-going costs and services if you already reside in one.


Firstly, if you are looking to purchase a retirement apartment, by releasing equity, you could raise the shortfall between the sale of your current home and the purchase price of your proposed new property.  The equity release could be raised on your new property and would complete at the same time as your sale and purchase. The equity release application could also be on a roll-up, or even interest only lifetime mortgage basis to fit in with one’s inheritance requirements, or household budget.


Secondly, if you are already residing in a retirement apartment, you could have the option of releasing equity to cover your annual service charges.  This could be by way of a lump sum lifetime mortgage which additionally has the option of a cash drawdown facility. This would particularly suit those looking to take annual withdrawals to supplement their income & cover the costs of maintaining residence in their retirement home. The drawdown facilities with many equity release schemes can allow as little as £1000 withdrawals at a time to suit those not wishing to withdraw too much.


Case study 1

Mr & Mrs F lived in the West Midlands, but had always dreamed of retiring to the coast and live out their remaining years in the peace and tranquility of a property with a sea view.  Their 3 bedroom house was worth £175,000.00 and they wanted to downsize.  Mr F was not in particularly good health and he wanted to make sure that Mrs F didn’t have the financial worry or burden that their large home would have if he pre-deceased her.  Downsizing though didn’t necessarily mean down-pricing.  The purchase price of their dream apartment by the sea was £200,000.00, meaning a shortfall of £25,000.00 plus the associated moving costs.

By giving Mr & Mrs F full impartial equity release advice and recommendation, I was able to offer them a Lifetime Mortgage lump sum through a specialist interest only lifetime mortgage lender for £35,000.00.  This allowed them to cover both the £25,000.00 shortfall to facilitate the purchase, plus £10,000.00 for moving costs. Overall, this not only assisted with the purchase of their retirement apartment by the sea, but also enabled them to live there in financial comfort.


Case study 2

Mrs S was already living in her retirement apartment when there was the untimely demise of her husband.  Now just in receipt of her own pension, Mrs S was concerned that she would not be able to cover the on-going living expenses.

The service charges amounted to £2,704.00 per annum (£52.00 per week) and being on a reduced pension, Mrs S would struggle to maintain her standard of living plus pay her normal household expenses.  Being a specialist in equity release, I was able to advise Mrs S of her options, including a full benefits check.


Mrs S was just over the threshold for benefits, therefore I could look at the option of a drawdown lifetime mortgage.  Mrs S released an initial amount of £10,800.00 to cover four years’ service charges, leaving her with a remaining cash reserve of £21,600.00.  The drawdown facility allowed Mrs S to release sufficient funds each year thereafter to pay her service charges on an annual basis.


How Equity Release Supermarket can help…

Over the years, I have helped many clients in the same or similar situation and have such pride in doing the job I love and being able to assist purchasers and homeowners alike. Being independent lifetime mortgage advisers Equity Release Supermarket have vast experience in assisting its clients with retirement apartment purchases or releasing equity on them.


In addition we have access to the best equity release deals including cashback, free valuations and specially reduced interest rates. We always offer a free initial consultation, to see whether we can assist the over 55’s with retirement mortgages and financial help.


If you would like more information on how these equity release plans work, please contact Marcelle on 0800 783 9652. Alternatively, please email mark@equityreleasesupermarket.co.uk


How A Drawdown Lifetime Mortgage Provides Insurance for the Future

Thursday, March 14th, 2013

Suddenly you’re approaching retirement and you’re left wondering – ‘where did the years go?’

Realisation is dawning on you all too clearly that from hereon in you will be reliant on a fixed income, your savings may start diminishing and your future anticipated costs are anything but guaranteed!


The question therefore is how do you protect yourself & family from those unforeseen costs that might suddenly arise? Well, there’s good news and bad news, and also a possible solution….so please read on.


Firstly, the good news.

The population of England and Wales is living longer than before and the most common age at death in 2010 was 85 for men and 89 for women, compared to 77 and 84 respectively in 1980. Thirty years ago there were 2,280 centenarians, today the figure is 11,610. Indeed this trend is set to continue and we are entering the age of the super centenarian (110). That’s the good news!


Now, for the bad news.

The basic state pension is currently £107.45 per week increased each April by the highest of either the average growth in wages, the Consumer Price Index or 2.5%. Yes, the new flat rate of pension of £144 per week will be payable from April 2017, but not for those already drawing the state pension.


And what happens to a surviving spouse or partner when they are widowed? Just the basic state pension and possibly the bereavement allowance up to £106 per week  for the first year depending upon National Insurance contributions and the age of your spouse on death. Added to this is possibly a reduced private or occupational pension for the surviving spouse (usually the widow) if you are lucky enough to have contributed to a pension plan during your working lives.


So how will you cope with the cost of home improvements, car repairs, increasing utility bills, let alone any care costs? And how do you provide for the financial security of your spouse after you have gone? A widow could easily have in excess of a decade to support herself on a reduced income.


The Possible Solution.

This article might have given you the impression that my job is to go around depressing people, but in reality my job is to ensure that my clients are fully aware of how they can use their major asset – their home, as a form of insurance against future financial difficulties.


Most people are familiar with a mortgage. A Lifetime Mortgage applies the same principles, however instead of running for a fixed term, will actually run for the rest of your life. It therefore allows you to borrow until the remaining owner dies or goes permanently in to care.


Types of Lifetime Mortgage

The most common equity release plan is on the roll-up lifetime mortgage basis, whereby NO monthly interest payments are required and the full repayment of the mortgage is made from the sale of the home on the last survivor’s death.


However, with the latest innovation in the equity release market, more lenders will now allow you to pay off the full, or even partial monthly interest payments if you want to keep the eventual loan lower than would otherwise have been on a roll-up basis. The interest only lifetime mortgage provides a flexible option to carry into retirement and can now be obtained on a drawdown basis with more2life.


All these Lifetime Mortgages are portable if you want to move house in the future and, if leaving an inheritance is important to you, you can protect a percentage of the eventual sale proceeds of your home. All these lifetime mortgages provide a guarantee that you would never leave a debt to anyone by way of ALL lenders providing a ‘no negative equity guarantee’.


The Drawdown Lifetime Mortgage

The major attraction with a Lifetime Mortgage is the “drawdown” option. This feature will provide you with a lifetime borrowing limit but does not commit you to borrowing the whole facility immediately. The drawdown lifetime mortgage was therefore borne with flexibility in mind.


Before drawdown schemes became available from the likes of Prudential, Just Retirement & Hodge Lifetime, customers only had the lump sum option. Given this cash amount needed was to last them at least 3-5 years, many decided to opt for a larger amount than would otherwise have been necessary. Languishing in a bank account & receiving less interest than paying on the equity release scheme was not best advice. Hence, the introduction of the drawdown equity release plan enabling retirees to take a lower initial sum, but taking extra funds in the future whenever they required.


As an example, a husband and wife aged 78 and 72 with a property valued at £250,000 could have a maximum loan limit of £52,500 but only start with the minimum loan of £10,000.

Interest would only accrue on the initial £10,000 loan and the balance of £42,500 would be readily accessible if they needed it and could be taken in stages. This is an excellent way of providing security for future unforeseen expenditure and would be available for the surviving spouse to use should he or she be alone and on a reduced income.


In should be noted that certain equity release companies cannot guarantee the drawdown reserve facility for life. Companies such as Aviva do retain the right to withdraw the drawdown facility under certain major events which would render them unable to fulfil their drawdown requirements. However, there are still companies available that will guarantee the reserve facility. By opting for the guarantee, you may pay a slightly higher interest rate, nevertheless you may feel more secure knowing these funds are available for a minimum of 15 years ahead. With living in such uncertain times, this could be a blessing.


This ”Lifetime Mortgage Drawdown” option, which only commits you to borrowing a minimum of £10,000, is sensible insurance for the future and if you would like to discuss the matter in more detail then please do contact myself – Mike Vicary on 07795 195302 or email mike@equityreleasesupermarket.co.uk

Equity Release – A Financial Solution To All Your Retirement Worries

Sunday, January 16th, 2011

Equity release refers to a secured mortgage arrangement for retired homeowners in the UK. It allows older people to unlock the equity from their property and use it for any purpose they want. With equity release schemes, the retired homeowners can release the equity they have accumulated in their property for years.


Who can apply for equity release?

When it comes to equity release schemes, there are few rules in regards to who can opt for them. The older you are, the more equity can be released from your home. In order to qualify for an equity release loan, there are some important criteria you need to fulfil. You should:

• Be aged 55 – 95 years
• Possess your own home
• Own a property costing £60,000 or more
• Have no or little mortgage
• Have a leasehold or freehold property with a minimum lease period of 75 years


The arrangement of equity release is usually set up by a qualified lending institution. The money can be received as lump sum, a monthly instalment or a combination of both. The best part of equity release is the fact that it allows homeowners to live in their property for a lifetime. After the property owner passes away, the property is sold and the lending institution regains its money.

Depending on the seller’s financial position, the buyer can take equity as a monthly payment or a lump sum. Unlike other mortgage loans, the cash unlocked from equity release is completely tax free. This allows the borrowers to spend the money in any way they want.

So, if you are looking to generate additional income post retirement, opt for equity release.


Equity Release – Two Types Of Plans Available

Friday, October 22nd, 2010

Equity release schemes are a great option if you are looking for an alternative way to gain cash. Retired individuals may find it difficult to live a comfortable life due to rising costs. Equity release schemes benefit those who are asset rich but cash poor.


There are two main types of equity release plans – lifetime mortgages and home reversion plans.


Lifetime mortgages

Lifetime mortgages are plans where you get a secured loan on your property with no monthly interest payments. The loan amount can be either taken as a lump sum or as monthly instalments. Lifetime mortgages have become popular over the past few years and this has encouraged many equity release providers to come up with variations on the scheme known as drawdown plans.

A drawdown plan allows you to release cash when you need it instead of taking the entire lump sum or regular monthly payments. This means that you will pay less interest over the longer term than if you took the whole amount as one release at the outset.


Home reversion plans

With home reversion plans, you can sell either part or all of your property to the equity release provider. You are not liable to pay any taxes for the amount received and you also get an assured lifetime lease with no monthly instalments to pay.

Even after you have sold off your property, you get to stay in your house rent free for a time period that you choose.

The older you are, the larger amount you can raise from a home reversion plan. Thus, age can be an important factor when going for this scheme.


Equity Release Schemes – Which Is The Best Scheme For You?

Tuesday, October 5th, 2010

Equity release schemes enable you to convert the equity from your property into a usable cash amount. These schemes are proving helpful for many older homeowners. Some of these equity release schemes function by offering you a regular extra amount of income or a lump sum amount, or sometimes both.

While equity release schemes may look attractive, they can be complicated and difficult to understand. Thus, before opting for an equity release scheme, it is better to get legal and financial advice from industry professionals.

Two types of equity release schemes exist – home reversion and lifetime mortgages.


Home reversion schemes

A home reversion equity release scheme allows you to sell a part (or a percentage) of your property to generate the required funds. The amount of equity you get from the equity release scheme will be lower than the market value of your property. This is due to the fact you are able to live rent free for the rest of your life in your property. After you pass away, the reversion company will sell your property and get their share of the money from the sales proceedings.

Home reversion schemes are only available from the age of 65.


Lifetime mortgages

Lifetime mortgages let you borrow the money without any need for monthly repayment. Similar to a home reversion scheme, lifetime mortgage equity release schemes allow you to stay in your property. The amount of equity remaining will completely depend on the final value of your property and your age. The money that you borrow can either be paid to you in instalments, a lump sum amount or both.

With this equity release scheme, the lender does not own your property. The amount that you borrow must be paid off when you sell or move out of your property, or when you die.

Lifetime mortgage schemes commence at the earlier age of 55 with a maximum release available of 19% of the property value.


For advice on which scheme would be best for you, please contact the Equity Release Supermarket team on 0800 678 5159.


Equity Release – How Older People Can Benefit From These Programmes

Thursday, September 30th, 2010

With the economy in its current state, people are trying to come up with new ways to generate capital for everyday expenses. Although it is possible for working individuals to do this, it can be difficult for the retired population. Fortunately, there are still a few ways retired people can gain capital and it is mainly through the equity in their homes that they can benefit.


Equity release programmes can provide retired homeowners with revenue from the value of their homes. These programmes are ideal for homeowners who are not interested in selling their homes and who want to stay there indefinitely. After weighing up the pros’s & con’s of moving & having decided that residing at the family home is to remain permanent, then equity release can be considered.


There are many other benefits offered by equity release

Equity release offers a lump sum that is free of income tax. It can also be utilised in reducing the amount of tax homeowners have to pay for their property. Providing any gift made to children or other beneficiary was made seven years prior to their death then this amount can become exempt from inheritance tax.

Equity release plan holders have the assurance that the interest rate taken at the outset, will remain exactly the same throughout the duration of the plan. Therefore assuming no further advances are taken, the future balance will be known for definate & one can budget for accordingly. If Bank of England interest rates do rise, the equity release interest rate remains unaffected.


All equity release schemes that are members of SHIP will also be protected by a no negative equity guarantee. This ensures that should the equity release scheme become more than the value of the home, then the equity release company can only receive the full market value of the house; any excess over & above will be written off under the no negative equity guarantee.

In addition to this, on the roll-up lifetime mortgage, the plan holders will always retain 100% ownership of the property. Therefore, any escalation in house price will be kept by the equity release plan holder, not the lender.

The capital gained through equity release, which is also known as an annuity, can be used as steady income. However, taking up an equity release programme will result in a lower inheritance for the family after the homeowner’s death. Due to this, it is important to consider this process carefully.


To see how equity release could benefit you, please contact Mark Gregory on 0800 678 5159 or visit Equity Release Supermarket’s website.


Equity Release Schemes – Unlock Lump-Sum Money Against Your Home

Friday, September 24th, 2010

If you are retired then you will be aware about the implications involved within the pensions industry. Confusion surrounds the current funding of company pension schemes & the size of the shortfalls that exist within them. The knock effect of this has been the lack of saving towards one’s retirement.

This is becoming more evident with today’s retired population having minimal savings for their retirement years. The financial implications of this are that people are struggling financially in retirement meeting everyday expenses & those ‘one off’ costs that unexpectedly arise.


Many retired people face various financial challenges when their earnings cease. If you cannot manage with a minimum pension and limited savings then equity release could be an ideal option for you.

Insurance companies & annuity providers today make up the current crop of equity release companies that provide equity release schemes to old aged homeowners. Home reversion plans and lifetime mortgages are the two popular equity release schemes offered by them. If you have decided to go for equity release then you must understand the procedure.


How equity release works

Although there are many equity release schemes in the market, all of them are designed on the same basic principle. These schemes lend you a lump sum amount of money against the value of your property. The equity release providers will eventually receive their money by selling the property after you die or move into care.


To qualify for equity release schemes, you have to be above 55 years and own a home which is worth a minimum of £70,000. The property should be of standard construction & any mortgage that is secured on it must be repaid with the equity release or alternative funds. You cannot have both an equity release scheme & mortgage running concurrently.

Therefore, people with little or no mortgage can potentially apply for a lump sum via equity release schemes. An equity release plan involves the lender placing a legal charge on your most expensive asset, so it is recommended to seek the services of an experienced & qualified financial advisor.

By opting for equity release schemes, you can receive a lump sum amount or regular income. This income will help you to live your retired life in a much better way. The money which you will get through equity release schemes is tax free, so you can spend this money in various ways.

If you are planning to go with equity release schemes then research properly, as it involves a big amount of money.


To seek the services & advice from an industry qualified equity release adviser call us on 0800 678 5159 or to find your local adviser by clicking here


Live A Luxurious Life After Retirement With Equity Release Schemes

Wednesday, September 1st, 2010

Equity release is a financial product offered to retired homeowners who require a means of releasing equity to meet their requirements in life. For individuals who depend partly on pensions to meet their financial requirements, equity release may be a considered option to address any income shortfalls that may exist.

This is where new equity release schemes will allow people in their old age to enjoy life without any financial difficulties.


If you are over 55 years of age & looking for a solution to meet your financial needs, you should seriously consider equity release schemes. When planning to opt for equity release, it is worth seeking independent professional advice. Depending on your requirements, these qualified professionals such as Equity Release Supermarket, will be able to help you to get the best deal from the range of lenders at their disposal.


The equity release scheme enables you to get the exact amount you require, dependent upon your age & current assets. The amount that you will get through equity release will depend mainly on the age of the youngest applicant, valuation & the present condition of your property. This is why it is important to keep your property in good condition.

If your home is in an inappropriate condition, lenders may impose conditions on completion. This could range from a retention of some of the release until the specified jobs have been completed. Other lenders may not even proceed to completion until all work has been carried out. Finally, some equity release companies may not even insist works get carried out at all & can be lenient dependent upon the case proposition.


To enjoy a larger sum of money during your retirement, it is important to keep your property maintained. With equity release schemes, you can get the amount as a lump sum, via drawdown or in the form of a monthly pension. If you want to live a luxurious and comfortable life in your old age, an equity release scheme would be an ideal solution to opt for.


To discuss your equity release options, please call Equity Release Supermarket on 0800 678 5159


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 – What Are The Types Available?

Monday, August 9th, 2010

Obtaining money through your house that has capital value is known as equity release. The percentage of cash to be received depends on the age of the person. The older the person, the greater the percentage. A person aged 55 years or over qualifies for this scheme. The maximum release that is available at age 55 is 19% of the property value.

This amount can assist in securing a person in their old age. The key benefit of an equity release loan is that a person can still own their property while enjoying its value.

The two main types of equity release are:


Lifetime mortgages

A lifetime mortgage is a scheme where you receive tax free cash by taking a secured loan on the property. The cash is paid usually by lump sum. However, there is also an option to take a regular income by the borrower. This loan is repaid to the lender after the person dies or moves into care by selling the mortgaged property. You can release 19% to 50% of your property’s current value, dependent upon age.


Home Reversion schemes

With Home reversion schemes, the property owner needs to sell a part or all of the property to the reversion company. If the borrower wants, he/she can sell the whole property. The money is paid to the borrower dependent upon the percentage of the property sold. For example if the reversion company takes ownership of 50% of your property, then after your death they will still retain 50% of the sale proceeds.

Equity release is a beneficial scheme that makes proper use of your assets in retirement.


To establish whether equity release is right for you please call on freephone 0800 678 5159 or visit the Equity Release Supermarket website at http://www.equityreleasesupermarket.co.uk


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