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Posts Tagged ‘New Life Mortgages’

Equity release calculators – how they can help you

Friday, July 1st, 2011

An increasing number of senior citizens now opt for equity release schemes with the aim to release cash (equity) from their property. This can be a wise decision in order to generate extra income during their retirement years. While a lot of equity release providers are available, not many people are aware of how such  equity release schemes work. At such times, it is prudent to consider taking advantage of professional help.

Financial institutions now offer the use of equity release calculators to their customers. Using this tool, one can determine the amount of equity that can be released from their property. Based on the outcome, the applicants can decide whether or not equity release is a viable option for them.

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With the number of equity release schemes on the increase, such as the recent addditions of Stonehaven, more2life, New Life Mortgages & last week Partnership, it is more important than ever to seek the services of an FSA qualified independent financial adviser. They will have the equity release tools available they will have been trained with to establish which scheme will provide the correct amount to be released. Guarded with this information it can lend them to the next stages of the decision making process in ascertaining which lifetime mortgage scheme is most suitable for such circumstances.

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Therefore, the equity release calculation can be guided towards establishing the following lifetime mortgage scenarios: -

  • What is the maximum I can borrow on an equity release plan?
  • What is the lowest interest rate on an equity release scheme?
  • What is the minimum amount I can borrow on a lifetime mortgage?
  • How much can I borrow on an equity release scheme if I am in poor health?
  • What are the costs in setting equity release schemes up?

Equity release calculators will help answer these types of questions & with the calculator tools of Assureweb, Trigold & The Exchange each equity release adviser with the CeRER & CeMap qualification, will have these methods of calculations available.

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The workings of an equity release calculator

Various equity release calculator formats exists that can usually be found on the website of the mortgages & other financial organisations. The homeowner first needs to provide information related to their property. Based on this data, the equity release calculator will predict an approximate amount of equity that can be released from their property.

Advanced calculators are also available that offer in-depth information related to different possibilities. However, the availability of such a tool is subject to the equity release provider. Before deciding on a deal, homeowners are always advised to try two different calculators. To get the best deal with equity release schemes, obtaining professional help would be wise.

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Practically, the size of the equity release is governed mainly by three factors which are: -

  1. Age of the youngest applicant
  2. The valuation of the property
  3. Whether any existing mortgage or secured loan is present

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Dependent upon the answers to these questions will determine the net equity release availability from the property. The data provided by the equity release calculation will be the maximum equity release posssible, however it will give an indication of the extent to which one can go & therefore tyou will have the knowledge as to whether equity release will be of assistance.

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More detailed equity release calculators can advise beyond these basic measures. For instance, should a history of ill heath be present, then a larger than normal lump sum can be achieved with an impaired life equity release scheme. This will not be present or have the ability to be calculated upon by the more basic equity release calculators. Additionally, the majority of calculators will only refer to roll-up lifetime mortgages & not home reversion plans, thus they do not answer the whole question & should only be used for guidance, not literally.

Again, it is therefore of upmost importance to seek the services of a qualified independent equity release advisor who has the accurate research & calculation tools at his disposal; whom with your input & personal information, can guide you to the right equity release plan.

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The Equity Release Supermarket calculator can provide an overview & the statistics involved with the maximum amount that can be borrowed on each equity release scheme. Experience our equity release calculator today as see how much you can release. Alternatively, speak to one of the Equity Release Supermarket specialists who can be found in your area by using the ‘find an adviser‘ interactive UK map.

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Equity Release Supermarket are established & award winning lifetime mortgage & Halifax Retirement Home Plan specialists.

Call freephone 0800 678 5159 for all your post retirement mortgage questions.

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New Equity Release Scheme Launches To Help Landlords in the Buy to Let Mortgage Market

Friday, February 11th, 2011

The resurgence of the equity release market gathers momentum in 2011 with the news that New Life Mortgages are set to re-introduce their landlord & second home equity release schemes on 11th February 2011.

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Following the additions of more2life & New Life Mortgages to the equity release market late in 2010, the latest launch from the innovative lifetime mortgage lender signals a degree of diversity to their portfolio.

New Life Mortgages temporarily withdrew from equity release market in 2009. They obviously haven’t been sat idle, but instead waited for their opportunity to re-enter at the right time & with the right products.

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Following on from my previous article on New Life Mortgages rejoining the equity release market in November 2010, here we discuss the features & benefits to landlords of this unique equity release plan.

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How does the scheme work?

The New Life Mortgages Landlord Loan provides a tax free cash lump sum based on a percentage of the value of the residential investment property & the age of the applicant. Plans start at age 55 & any landlord with a portfolio of upto 5 rental properties can potentially release some of the equity tied up within them.

This buy to let equity release has no set repayment date & no monthly repayments to make. The loan is eventually repayable on the sale of the property when the last surviving borrower has died or gone into care.

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How do I qualify?

  • Minimum age of 55 (for joint applicants minimum age 55 of the youngest)
  • Investment property must be in England & Wales
  • Landlord loan minimum property valuation  of £100,000 & a maximum of £1million
  • Minimum release is £25,000 & maximum is £500,000
  • The property should be standard construction with flats over 5 storeys excluded
  • If leasehold property, then 80 years must be remaining on the lease
  • Any existing mortgage must be repaid on commencement of the Landlord scheme

How Much Can I Borrow?

This is determined by the age of the youngest applicant & the value of the investment properties:-

  • Age 55 –  16%
  • Age 60 –  21%
  • Age 65 -  26%
  • Age 70 -  31%
  • Age 75 –  36%
  • Age 80 –  41%
  • Age 85+ – 45%

Therefore, as an example a 65 year old landlord with a single investment property of £200,000 could potentially release a capital lump sum of £52,000.

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How does it compare to a normal equity release scheme?

The scheme in principle works exactly the same. You borrow the money, the interest accrues on a monthly basis & it is repaid when the property is finally sold.

The differences lie in the rental side; an assured shorthold tenancy agreement must be in place to qualify & cannot be let to family members.

Also, there are maximum borrowing criteria, similar to a buy to let mortgage. This states that the monthly interest charged cannot be more than the rental income received.

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What are the costs involved?

  • Valuation fee dependent upon the value of the investment property
  • Application fee which can be added to the loan
  • Solicitors legal fees
  • Lifetime fixed monthly interest rates of 6.39% (age 55-80) & 6.55% (age 81+)
  • Early repayment charges only 5% for the first 5 years. No charges thereafter.
  • Any advice fee charged by your equity release specialist

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Practical uses of the New Life Landlord buy to let mortgage?

The equity release funds can be utilised in many ways.

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With market opportunities growing in the rental market as house prices fall & yields increase, bargains are there to be had.  Should any residential landlord wish to expand their portfolio & have concerns over the expense of buy to let mortgages they can consider schemes such as this.

Should a potential landlord spot a new investment opportunity, but has limited capital for deposit, then landlord equity release schemes could assist. The borrower could review all properties under his portfolio & by using an equity release calculator; assess how much could be released individually to meet the shortfall required.

Additionally, with the age group eligible for this buy to let mortgage there could be tax implications. Therefore, should some of these assets need to be disposed of, rather than selling the property & incurring capital gains tax, then equity release can be undertaken instead.

Finally & the most common purpose for this could be for debt consolidation purposes. Should financial difficulties arise on a buy to let mortgage or other personal finances, then subject to the amount that can be released, these debts can be repaid.

Perhaps one has just had enough repaying a buy to let mortgage & would rather receive the gross rental income to support their retirement?

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The uses of the New Life Landlord scheme can be many; so to discuss how the features of this unique buy to let lifetime mortgage can benefit you contact the Equity Release Supermarket team on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk.

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Equity release schemes – fulfil all your financial requirements

Tuesday, December 21st, 2010

If you want to release some money against the value of your property then equity release schemes can be ideal options for you. At present, many people after retirement opt for equity release to improve their income or make lifestyle purchases. Here we look at the features & minimum specifications of these schemes.

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What qualifications are required for equity release?

As equity release schemes are specially designed for retired individuals, you must be over 55 years of age to apply. It is necessary to own a home which is generally worth more than £60,000. This is the minimum acceptable property valuation on any equity release plan in the marketplace & is offered by New Life Mortgages.

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All equity release schemes, prior to inception will require the mortgage or any other secured loan upon it to be repaid either before, or at completion. Therefore, it is essential that the mortgage is low or at least below the maximum equity release possible. Thus, if a high mortgage balance exists it may not be possible to complete an equity release scheme. This means that you should have very little or no mortgage at all to enjoy the benefits of equity release schemes.

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What benefits are offered by equity release schemes?

One of the best things about these schemes is that they will offer tax-free cash. This means that you can spend the money in different ways. For instance, you can buy a new car, a new home, pay off outstanding debts or go on holiday.

Unlike bank loans, equity release schemes allow you to stay in your home with no monthly repayments and also enjoy the cash. Today, various equity release loans have been introduced, so you can choose the one which suits your needs. However, as always we suggest that you always receive independent financial advice to ensure that the correct scheme is recommended to suit your requirements.

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To ensure you receive upto date advice on the best deals & current offers available ring the Equity Release Supermarket team on freephone 0800 678 5159 or email mark@equityreleasesupermarket.co.uk with your query.

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More Great News For The Equity Release Market As New Life Mortgages Return With Lowest Interest Rate

Wednesday, November 3rd, 2010

Signs are certainly showing of a recovery in the equity release market as news that existing SHIP member – New Life Mortgages are returning with two new competitive products.

They arrive on the back of the recently launched impaired life equity release lender; more2life at the beginning of October.

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Although New Life Mortgages hadn’t officially withdrawn from the market in 2009, it remained in the market whilst new funding sources were explored..

That time is now & details of the revamped equity release schemes can also be found on the Equity Release Supermarket website by clicking here.

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New Life Mortgages have decided to make a statement, by not only relaunching their product range, but also arriving with the lowest interest rate in the market at just 6.35% monthly.

The Lifetime Fix and Lifetime Gold products both position themselves into the ‘roll-up’ lifetime mortgage range & are designed to be the most competitive equity release products in the market for the over-55’s.

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The New Life Gold product is designed to offer the maximum release possible for a client in good health. Plans start at age 55, with a release of 20%, thus offering the maximum release currently available in the equity release market.

The age related percentage’s that can be released are as follows: -

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Age 55 – 20%

Age 60 – 25%

Age 65 – 30%

Age 70 – 36%

Age 75 – 41%

Age 80 – 46%

Age 90 – 51%

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The product is uniquely available only on a single life basis & has a very competitive interest rate of 6.75% monthly. This compares favorably with its peers at the maximum release end of the market who would be Aviva & new entrant more2life.

As an extra incentive, New Life Mortgages are offering £300 cashback on NLM Gold cases that complete prior to December 29.

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The Lifetime Fix is the second product on offer from New Life Mortgages with the lowest rate currently available in the equity release market at just 6.35% monthly.

Available on a single & joint life basis the plan releases a lower amount than the Gold product, starting with a release of just 17% of the property value at age 55.

As an added incentive New Life are offering £600 cashback on cases completed before 29th December, so if you are considering equity release with a low interest rate hurry!

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Both schemes have a minimum acceptable property value of £60,000, which again is the lowest in the equity release market & may bring previously ineligible applicants a new lease of life?

If early repayment charges are an issue with some lenders relying on gilt rates, New Life Mortgages have a more conventional attitude with the simplistic rate of a 5% penalty in the first 5 years. Thereafter no penalty exists.

This could obviously favour people who may have shorter term retirement plans with their properties, although equity release UK schemes are designed to run for the rest of your life.

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Should you require a product fact sheet or quotation on any of these New Life Mortgage products, please call the Equity Release Supermarket team on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk

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Breathing ‘New Life’ to Buy to Let Mortgages – The Equity Release Way

Tuesday, September 15th, 2009

Could equity release assist the resurgence in the buy to let market & reclaim it from the doldrums?

 

With the equity release market becoming more & more competitive, we focus on a particular product that has found itself a niche in this market.

 

You can’t have failed to notice in the past 6 months that ‘mortgages’ have become synonymous with terms such as ‘credit crunch’ & ‘falling property values’ & anything involving difficulty in obtaining credit.

 

The mortgage market is showing preliminary signs of improvement, but not before time & there is still a long way to go before its back on its feet.

 

One particular area in the financial services sector that has been associated with this slump is the buy to let mortgage. With blame being apportioned to these products having acted as part-catalyst to the advent of the credit crunch, lenders have had their fingers burnt & even withdrawn from lending on these products. It’s therefore difficult to see how they will recover in time & ahead of the general mortgage market.

 

However, all is not lost. You’ve heard the saying ‘being in the right place at the right time’ – well this could be one of those moments! 

 

There has been a Landlord Equity Release scheme available for a number of years which has been drifting along without much prominence. This equity release scheme from New Life Mortgages enables landlords over the age of 55 to be able to assist them financially by releasing capital from their buy to let portfolios.

 

Buy to let landlords generally build their portfolio’s by relying on property values to increase. Once additional equity is built up via property value escalation, the landlord can then apply for a buy to let remortgage to raise additional capital. These new funds can then be used as a deposit towards to next purchase…& the momentum continues.

 

The problem now is that property values have fallen, hence this portfolio creation technique has been somewhat dismantled.

 

With the buy to let market having experienced massive growth over the past decade, thousands of mortgagees are now relying on the equity in their buy to lets and holiday homes for retirement purposes.

 

So how can equity release help?

 

Well, landlords over the age of 55 can now raise equity without having to sell their properties or even pay any monthly mortgage payments in the process. Instead, the interest is “rolled up” and the loan is repaid only on death, go into long-term care or the house is sold.

 

This equity release scheme has proved to be attractive to landlords who want to release equity in their portfolios in order to supplement their pensions. With the current depressed property market, landlords may be reluctant to sell & thereby delay the eventual sale in order for their families to benefit from future growth.

 

The New Life equity release scheme could be taken out on an unencumbered property in which the capital raised could be used in assisting with retirement plans or even the purchase of another buy to let property.

 

Alternatively, the plan could be used to repay an existing mortgage. Thus, by not having to make any further monthly mortgage payments & with the landlord still in receipt of rental income, this has the overall effect of increasing their retirement income.

 

 

Another benefit of this scheme is from a taxation viewpoint.

 

By taking out equity release, landlord’s could potentially avoid a capital gains tax (CGT) bill they would pay if they sold up — although they would be still be passing on a reduced tax liability to their heirs. This can also apply to inheritance tax.

 

New Life’s equity release scheme takes advantage of the Inland Revenue rule that profits are revalued when someone dies. When people die and leave their belongings to their family, or indeed anyone else, there is no CGT to pay at the time. When the property is eventually sold, CGT is based on the difference between the proceeds of the sale and the market value at the time of death.

 

Another perk for landlords is that the interest charged on the equity release can be offset against the tax on the rental income, even though the interest is rolled up.

 

The scheme is also available on holiday cottages and second homes, thus extending the markets potential.

 

Other benefits in brief are that the New Life equity release plan has no impact on the landlord’s main residence. This will leave it free from any potential legal charges on the property.

 

Finally, the landlord can raise commercial finance at a residential rate which is currently 7.25% compounded monthly.

 

Main features of the buy to let scheme are: - 

 

·       Minimum age of the youngest must be 55

·       LTV’s start at 15%

·       Minimum loan £26,000

·       Minimum property value of £100,000

·       Rental Income must exceed the interest being charged

·       Never owe more than the value of the property

·       Early repayment charges are over 5 years 

 

It is niche equity release products like this from New Life Mortgages that will instill further confidence in the current subdued property market & we look forward to further innovations in this sector.

 

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