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Posts Tagged ‘Prudential’

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

Looking to Switch Lifetime Mortgage Schemes Could Prove Prudential

Sunday, February 10th, 2013

With lifetime mortgage schemes becoming increasingly commonplace and new borrowers on the increase, we look at how existing equity release customers could still benefit by reviewing and possibly remortgaging their existing plans.

 

Today, the equity release market has expanded to include a variety of different products. At the same time, interest rates today also tend to be more favourable to those a few years back. In light of this, those with existing lifetime mortgage schemes need to weigh-up the pros and cons of shopping around and possibly swapping or switching lifetime mortgage schemes.

 

Older lifetime mortgage schemes from the likes of Norwich Union, Northern Rock, Mortgage Express and Portman Building Society could have equity release interest rates of 8% and upwards if taken out in the halcyon days. However, times and products have all changed, and for those who thought their equity release was a ‘one-off’ event, could never have been more mistaken.

 

Like any conventional mortgage, equity release plans can also be moved to a new provider should the terms be more favourable. There could be a number of reasons to remortgage an older equity release scheme: –

  1. Lower interest rate
  2. Further borrowings
  3. Swap to a more flexible plan

 

Looking at these individually, we can explain the circumstances why many more people are now remortgaging their old lifetime mortgage plans.

 

Lower Interest Rate

The major factor to the expense of lifetime mortgages is the interest rate. Due to the annual compounding effect of the interest, then by cropping 1-2% off the current interest rate can literally save £1000’s over the remainder of the planholders life. This would be most beneficial for the children who will end up with more net equity available upon the death or their parents moving into long term care.

With interest rates from Aviva now as low as 5.57%, by conducting a lifetime remortgage even from an old Aviva capital release plan, would be possible & cost effective. With older lifetime mortgage rates being as high as 8%, the amount that could be saved in interest would be enormous over a long enough period of time.

 

Further Borrowings

It may have been many years since the original tranche of tax free cash was taken and as we know, money these days doesn’t go that far. Therefore, existing lifetime mortgage policyholders may have found this money they took out years ago has dwindled away and are maybe considering their next steps again.

Don’t worry because you have two options – return to your current lender for a lifetime mortgage further advance, or failing that, consider a completely new lifetime mortgage company, if their terms are favourable.

For instance, if your health has taken a turn for the worse then consider an enhanced lifetime mortgage scheme from the likes of Aviva, Partnership or more2life. Having ailments such as high blood pressure, diabetes, heart trouble or even being a smoker can influence a lifetime mortgage terms and conditions. If any of these symptoms exist, then the aforementioned lenders can offer a greater lumps sum than normal; exceptional should you now require maximum fund availability.

 

Swap to a more flexible plan

Lifetime mortgage plans of old were pretty inflexible, being a matter of taking a one-off lump sum and then sitting back thinking ‘job done’. Today’s equity release schemes have been designed with flexibility in mind.

Whereas previously only a single lump was on offer, nowadays with the advent of drawdown lifetime mortgage schemes, you can take a smaller initial amount & leave the surplus in reserve for later. This course of action has its benefits as you will only be charged interest on the capital withdrawn, not on the funds left in the reserve facility. A drawdown lifetime mortgage therefore can provide a cash reserve facility for additional borrowings required in the future. This would prevent you from having the expense of moving schemes again in the future.

A more recent development in the field of lifetime mortgages has been the ability to repay the interest which has not been a function that has previously been available. The interest only lifetime mortgage has seen a boom in sales recently now that retirees can protect their children’s inheritance by making monthly repayments of interest. Therefore, even if you have been on a roll-up scheme, but feel ‘enough is enough’ with the balance reaching its peak to feel comfortable with, you could switch to an interest only lifetime mortgage plan & consolidate the balance.

 

Which lifetime mortgage to swap to

Lifetime mortgage schemes essentially allow you to release some of the equity tied up in your home. The main types of lifetime mortgage schemes are the drawdown lifetime mortgage, roll-up, enhanced and the interest only lifetime mortgage. Lifetime mortgages are loans which need to be repaid once the property is sold.

Clearly, when it comes to equity release schemes, the lower the interest rate on the loan the more you save over the longer term. If you already have an existing equity release loan on your property, switching to a scheme with better interest rates may save you money. However, switching to an equity release scheme with a lower and better interest rate may not necessarily mean that you end up saving money.

 

It is important to find out whether your existing equity release lender has any early repayment charges in place. If you are liable to pay any early repayment penalties, these may cancel out any saving you make by switching. To find out whether switching to a scheme with better interest rates really saves you money, it is important to consider any early repayment charges in your calculations.

Equity release schemes have come a long way since they were first introduced to the market. Today, a much wider variety of products with various bells and whistles can be found. Switching to a more current plan may therefore be beneficial not just from the point of view of interest rates but for flexibility and new features as well.

 

For a free assessment of whether a lifetime remortgage could be beneficial then contact Equity Release Supermarket. With experienced lifetime mortgage advisers attuned to the complexities of swapping plans, they can analyse whether it would be in your best interests, or not to change equity release plans.

 

Call us on freephone 0800 678 5159 today for you free lifetime remortgage assessment or email mark@equityreleasesupermarket.co.uk

 

Equity Release – The Only Way is Ethics

Sunday, October 21st, 2012

With news that equity release schemes are becoming more of a mainstream mortgage for the over 55’s, we look at how the equity release market is regulating the protection of its consumers.

 

We have all heard the stories of how equity release schemes are bad for you and the local gossip columnists berating the expense of these plans. However, the equity release industry has come a long way since the original equity release plans were offered in 1965 when the average house price was approximately £4,000!

 

Why was regulation introduced?

It was the earlier version of equity release schemes that started creating a stir. Back in 1988 a new type of plan was introduced called a ‘home income plan’. They relied on using two financial instruments – an annuity or investment bond to provide an income, which in turn paid an interest only mortgage that raised the initial capital. The annuity income would have been sufficient to not only pay the mortgage but also provide additional funds to supplement the applicant’s income.

 

In 1988, the principles of the scheme were sound. However, there was no account taken of how future interest rates may change after a years of economic stability. Therefore when interest rates rose steeply in 1990 and property prices fell significantly, there were unfortunate cases of people experiencing negative equity. Additionally, as a consequence of higher interest rates, the annuity income became insufficient to cover the monthly mortgage payments, thereby wiping out the residual personal income also. These home income plans were subsequently banned.

 

The launch of SHIP

Such disastrous events were the catalyst for greater regulation of these equity release type products and led to providers in this market forming a coalition. This was heralded as SHIP (Safe Home Income Plans) and was introduced in 1991 to protect the holders of such schemes and their beneficiaries.

 

Further bad news

However, the problems were not answered immediately. During the mid 1990’s we had certain banks – Barclays and Bank of Scotland introducing SAM’s (Shared Appreciation Mortgages). These schemes worked on the basis that the mortgagee released an amount of equity in return for a proportion of the house value. No monthly payments of interest were required. However, the banks took not just the current value, but also a percentage of the future value.

You may recall that the mid to late 1990’s house prices thereafter soared. The bias was obviously in the banks favour (no changes there) to the tune of approximately three to one in their favour in any property escalation.

These schemes were consequently withdrawn and we are still hearing stories in the news today about people who took out SAM’s & have no redress financially from the FSA.

 

Step forward the FSA

Sooner, rather than later the Financial Services Authority stepped in to regulate the market & by 2004 the Government had brought forth legislation protecting lifetime mortgage customers. The protection didn’t just stop with the schemes; financial advisers now came under the auspices of the FSA and had to meet certain criteria to be able to provide equity release advice.

The FSA then introduced the Financial Ombudsman Service and put the FSA Compensation scheme in place to recompense people who had been mis-sold. Previously, applicants only had the courts as protection and taking on the banks could prove an expensive exercise.

By 2007, Home Reversion schemes were also governed by the FSA leading to stricter controls on all types of equity release schemes.

 

By this time some of the major equity release companies such as Norwich Union (now Aviva) and Northern Rock had joined SHIP. Equity release schemes started going through innovation with drawdown equity release plans becoming popular and being released initially by Prudential, Just Retirement & Hodge Lifetime. With mixed attitudes towards beneficiary’s inheritance, we had the introduction of interest only lifetime mortgages from Stonehaven which allowed some, or all of the interest charged being paid off.

So, not only has the market emphasis changed towards regulation, but also the products themselves have seen massive changed in concept and design.

 

Further peace of mind – legals

So far we have talked about how the FSA has helped regulate the market and the equity release companies themselves designing better products, but what about the equity release process itself?

 

The legal aspects of equity release have now been indoctrinated within the SHIP rules. It is here that extra layers of protection have been provided by the equity release solicitors and provide the final checks of the equity application process. From checking the identity of the applicants, establishing genuine reasons for the raising of capital, particularly when gifting to family and ensuring legal title & conveyancing thereof, solicitors have an important role to play.

 

Under SHIP rules, two solicitors must be involved – one for the applicant & the second on behalf of the lender. This is to ensure there is no conflict of interest and protect both the lender & equity release customer. The applicant’s solicitor must also sign a SHIP certificate to state he is satisfied that all aspects of the equity release have been brought to their attention, implications & that the rules of ‘caveat emptor’ persist. Until the SHIP certificate is signed then no equity release application can complete.

 

SHIP update

Further rebranding of SHIP was felt necessary as the market grew and a louder voice was felt necessary for the equity release market as a whole. After much debate it was proposed that ‘The Equity Release Council’ would provide the new voice of the industry. SHIP has now moved on and hopefully the feeling and attitude to all things equity release. It has travelled much distance since 1965 and overcome some dark days along the way.

 

Nevertheless, this is a new dawn for the equity release industry. With greater trust, greater demand and greater product innovation still to come the future is looking bright for the protection of its customers.

 

If you are considering equity release and need assistance on receiving the best equity release advice call the team on 0800 678 5159.

 

Is it Worth Reviewing My Existing Equity Release Mortgage?

Friday, May 4th, 2012

There are many reasons why you should sit down & review your existing equity release mortgage. Like any financial undertaking, products do evolve and change, hopefully for the better over the years, & equity release schemes are no different.

 

Here we look at the reasons for reviewing an older equity release mortgage, understanding the benefits & how to go about ascertaining whether you can remortgage your existing equity release scheme, or possibly staying put with your current provider.

 

Reasons for considering an analysis of your existing equity release plan

Let’s first have a look at the factors for consideration in the transfer, switch or remortgage of your current plan: –

  • Could it be because your existing scheme has now exhausted its maximum lending limits with your current equity release provider?
  • Maybe you now require additional tax free cash due to change in circumstances or a financial emergency has arisen.
  • Simply because you require a more competitive equity release deal than at present as you are concerned about the effect the roll-up & the compounding of interest that is affecting your equity release balance.
  • Finally, there could be better equity release plans available in today’s marketplace that were not available many years ago and you wish to take advantage of this to save your children’s inheritance over the longer term.

 

What has changed since you took out your original plan?

Dependent upon when your original plan was taken out, many lenders are now offering better, more flexible and more secure plans. The main influence though will be the fact that interest rates have dropped so significantly. Having experience of advising on the older Norwich Union equity release plans, I have evidenced the fact that around 10 years ago their rates were in excess of 8%! How times have changed.

 

Not only that, but my team of equity release advisers have similar experience of the older schemes which is invaluable in the decision making process & analytics of whether to transfer your existing lifetime mortgage or not. Having worked for the likes of Norwich Union equity release, Prudential, NatWest, Key Retirement Solutions & Aviva, we have the experience & knowledge to conduct a full analysis of the equity release pros and cons relating to a potential remortgage situation

 

How low have equity release interest rates fallen?

The fact is, if you already have an equity release plan, now is as good a time as any to re-evaluate it and shop around. Although not as low as conventional mortgage rates, equity release interest rates have fallen recently, but mainly due to competition in the equity release market. With their aggressive stance presently Aviva have become the darlings of the lifetime mortgage market with their lowest interest rate of just 5.92%. But it doesn’t just stop there. With a free valuation thrown in & £500 cashback this represents the deal of the century!

 

When considering a remortgage, interest rate alone is not the factor that determines your decision. The costs involved in setting up the plan are essential & these should be minimised in order to make the transition ads costs effective as possible. Therefore, the current Aviva Flexi drawdown lifetime mortgage plan is possibly the one plan that would be a viable proposition to switch over to.

 

What other factors must be considered other than interest rate?

It is important to make sure that any new potential equity release scheme is flexible and can be modified whenever your circumstances change. Equity release schemes must meet immediate needs, but equally, it must also be able to adapt to the future. Many new equity release schemes are much more flexible than their previous counterparts. For instance, drawdown lifetime mortgage schemes are now the most popular form of equity release mortgage currently available. This is opposed to the mainly lump sum mortgages that were available in the past, which were inflexible, could only be reviewed every 5 years & you had to budget on this basis accordingly.

 

When reviewing clients existing equity release mortgages, I may find several better and more suitable products on the equity release market today. However, it is not simply a case of switching lenders. Many existing equity release schemes may have clauses that make it quite binding in the long term and may incur additional charges such as an early repayment charge. This factor could be the sole reason whether to switch equity release lenders or not and deter offsetting any savings made from switching to a new plan.

 

It is important to consider several factors while comparing the existing equity release plan to a new one. Current interest rates, the current value of the property and the amount that needs to be borrowed. A switchover can take up to 60 days, so it becomes important to take into account interest rates over 60 days, setting up costs and the current redemption figure to work out the amount that can actually be borrowed.

 

What action should I take now?…

To review your existing equity release mortgage, you will need to consult an independent equity release adviser who can provide impartial, unbiased and experienced advice on different options that are available. A careful and detailed comparison needs to be made, considering various costs that will be incurred during a switchover, including setting up costs, application fees, solicitors’ fees and advice fees.

 

From significantly lower interest rates, to more flexible terms, switching to a new plan may have several advantages for yourself…and your beneficiaries. As a company who is remortgaged many older equity release mortgages we can speak and practice from experience.

 

For a free equity release analysis of your existing lifetime mortgage, contact the Equity Release Supermarket team on 0800 678 5159 or complete the online contact form today.

 

How Easy is it to Remortgage My Equity Release Plan?

Sunday, April 22nd, 2012

Equity release schemes have now been in existence for over 15 years in their current format. Here we answer some common questions such as – ‘Can I get a better interest rate?’ & ‘Can I borrow additional funds? ’.

 

Equity release schemes allow you to free up some or all of the equity tied up in your property and use the tax free cash for lifestyle reasons. This can be a particularly useful option for those who do not have enough cash flow and own a property, but do not wish to sell it.

If you already have an equity release scheme but for some reason you’re thinking, ‘should I remortgage my equity release?’ it may be worth your while to compare equity release rates & deals to find a more suitable product.

 

The equity release market is constantly changing, with interest rates rising and falling, and new innovative equity release schemes becoming available all the time. For instance, interest rates at the moment are much lower than they were just a few years back. So if you decide to remortgage your equity release just now, the fall in interest rates could result in significant savings for you over the long term, even when you take into account the setting up costs, which include solicitors fees, application fees etc. Not only that but you may have released all the money from your original plan & now find you require a ‘top-up’ to continue enjoying your retirement.

 

Why should I review my existing equity release plan?

With equity release schemes becoming increasingly popular, equity release providers are developing new products and schemes all the time. Something that was not an option a few years ago may now have become entirely possible. Therefore, a more suitable and pragmatic product may now be available. This means that by reviewing your existing equity release UK plan and shopping around for new options is a good idea, especially at this point in time.

 

What should I look out for?

Equity release schemes are defined as a lifetime mortgage. As such all plans have some form of in-build early repayment charge which is differentiated by the company offering the equity release plan. These penalties can exist for a set number of years on a fixed basis, or alternatively they can be linked to an investment such as government gilts or Bank of England base rate.

Particularly government gilts seem to be a favourable barometer used in today’s equity release marketplace. The two largest lifetime mortgage companies – AVIVA & Just Retirement have decided to use them, so you need to be aware of potential back end penalties if the equity release mortgage is paid off early.  Other potential suitors such as LV= (Liverpool Victoria) & New Life Mortgages will only charge a fixed percentage penalty over either 5 or 10 years, with no penalty thereafter.

 

What is the next step?

If you are considering remortgaging your existing equity release scheme you must seek the professional services of an equity release adviser who has the experience of remortgage work. The adviser should be independent, so as to have the whole range of equity release schemes at their disposal. This is important as to remortgage again will incur a new round of equity release set up costs which need to be minimised as much as possible to ensure the new equity release deal is viable.

Before you decide to proceed with an equity release remortgage, it is important to consider several factors.

Remortgaging an existing equity release plan is not just a matter of switching to a new policy.

 

The following areas all need to be assessed & equity release comparisons made: –

Current value of the property – this may have changed since the original valuation, particularly in light of recent market conditions
Age of the youngest applicant – since the original equity release plan was taken out, you will be older, thus the loan-to-value ratio’s will have increased also meaning you can borrow a higher percentage of the house value
Balance of the existing equity release scheme – this can be based on your last annual statement or by requesting a redemption statement from your lender
Whether any early repayment charges would apply? – this can be ascertained from the redemption statement that should be ordered from your existing lifetime mortgage provider. This figure can be the difference between staying & switching plans dependent & the size & duration thereof.

 

Upon collating this data your equity release adviser can make an informed decision as to whether to stay put, or it’s in your best interests to switch plans. This is where the adviser’s independence becomes important. With any new equity release application comes a new set of set up costs. However, if your adviser can obtain a free valuation, cashback or any other incentive current available, then this will mitigate some of the new charges & make the whole process more worthwhile.

Professional financial advisers from Equity Release Supermarket will have all these tools at their disposal. With years of practical experience & many advisers having worked at the likes of AVIVA & Prudential, we know how these plans can be remortgaged & transacted quickly & cost effectively. With our current crop of best equity release deals we ever had, now is definitely a good time as any to consider saving yourselves, & your beneficiaries £1000’s by switching your existing equity release plan.

 

For a FREE no obligation equity release remortgage analysis, please contact the Equity Release Supermarket team on 0800 678 5159.

Alternatively, please complete the ‘find an adviser’ contact form to book an appointment with your local equity release adviser.

 

Equity Release Supermarket is one of the leading independent, over 55’s equity release specialists who have won awards for quality & impartial advice.

They can be contacted at mark@equityreleasesupermarket.co.uk where your enquiry will be treated with strictest confidence.

 

Has Your Prudential Equity Release Application Expired?

Monday, April 12th, 2010

Prudential equity release schemes were withdrawn on 31st December 2009, however the application period was extended in order for pipeline cases to reach satisfactory completion.

 

However, this period was only extended until 31st March 2010 & Prudential invoked strict guidelines as to their final outcome.

Initially it seemed the 3 month extension seemed quite generous as most equity release cases should normally complete within a 6-8 week period.

However, in certain circumstances delays may be incurred which may not have been apparent from the outset. It is becoming inceasing apparent that clients are now experiencing scenarios resulting in this deadline being missed.

 

One example such example is aligned to the fact that a previous charge may have been placed on the property; often many years ago.

As an equity release company will not permit any other charge being present on the property, then this previous charge must be removed.

The solicitor must therefore include this procedure in the legal process & thus could result in considerable delays in finding who originally put on the charge.

 

Over the past decade, many financial institutions have changed name, been taken over or even ceased trading. It can therefore prove difficult for the solicitor to trace the original source of the charge & then getting this removed in order for the equity release to complete.

Nevertheless, a solicitor of experience in these matters would seek to obtain proof from the subject lender to prove the charge still exists. If they are unable to do this then the lender must remove the charge from the land charges register & subsequently the equity release can proceed to completion.

However, from experience this period of dialogue between lender & solicitor can take time, cost & has resulted in the Prudential application being cancelled.

 

Obviously, this Prudential deadline has now passed & it is become evident that clients have now become stranded & out of pocket given if their application had not completed by 31st March 2010.

 

All is not lost.

 

Equity Release Supermarket are increasingly assisting customers left stranded & financially out of pocket by the Prudential. Client fees that have been paid already could include valuation fee & solicitor’s fees for work incurred upto the cancellation of the Prudential application.

We are able to take over from where the Prudential left off & with liaison with the solicitor concerned, can take over the case, find an alternative lender & endeavour to complete quickly with the existing information.

In many cases we are able to provide reduced fees in setting up the new application.

This is due to Equity Release Supermarkets ability to obtain free valuations, reduced interest rates & cashback deals that will go considerable distance in alleviating some costs already incurred.

 

If you have experience of the Prudential cancelling your equity release application & would like to explore your options with transferring to a new lender, please contact Mark Gregory on

t: 0800 678 5159 or

mark@equityreleasesupermarket.co.uk

Stonehaven’s New Interest Only Lifetime Mortgage Lending

Thursday, March 11th, 2010

Stonehaven, the innovative equity release lender that originally sourced its funding from Santander, should now benefit from the withdrawal from the market of the Halifax Retirement Home Plan.

Stonehaven now use various finance houses in order to release equity in this sector. Their Stonehaven Interest Select plan can provide an interest only mortgage  that will run for the rest of your life.

 

To provide peace of mind to their customers, the interest rates are fixed for life. Therefore you can be safe in the knowledge that your monthly interest only mortgage payment will never change, regardless of external interest rates.

 

The Stonehaven Interest Select plan  has been given the rare title these days of a self certification (self-cert) mortgage as NO income verification is required. Stonehaven class the payment of interest as a ‘contribution’ as such do not require proof of any income. The Stonehaven Interest Select plan also has the added facility of selecting the amount of interest you wish to pay. Stonehaven will allow a contribution of anywhere between £25pm upto the full interest payment so one can fit the monthly payment in with their budget.

 

Should not all the interest be repaid, then there will be an element of roll-up onto the original capital raised. The balance will therefore increase over the years, but not as great as otherwise would be if no payment was made at all. This could be great news for the children or beneficiaries who wish to maximise the amount they receive at the end of the day.
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.

Stonehaven’s existing lifetime mortgage customers have received continued good servicing & they have pledged to meet all the existing terms and conditions.

 

New applications, supported by relevant Key Facts Illustration can only be processed by qualified financial advisers such as Equity Release Supermarket & cannot be done direct. Applications must include a cheque to cover the valuation fee.

 

Offers made by Stonehaven are normally valid for a period 3 months & if you are considering an alternative to the Halifax Retirement Home Plan then the Stonehaven Interest Select plan can meet your requirements.
If you have any enquiries or questions you wish to ask then please contact the Equity Release Supermarket  team on 0800 678 5159.

Mark Gregory CeMap CeRER

 

Just Retirement Become The First Company To Reduce Equity Release Interest Rates In 2010

Monday, January 4th, 2010

With immediate effect Just Retirement has reduced their equity release interest rates  from 6.79% to 6.59%.

 

This news arrives in conjunction with the departure of Prudential from the equity release market at the end of 2009 & is a bold move readdressing the negative moves on interest rates at the back end of last year. The interest rate reduction applies across all age ranges & as a consequence Just Retirement  now becomes one of the lowest drawdown equity release  schemes in the market.

 

In addition to this rate reduction, Equity Release Supermarket can also obtain a generous £450 cashback for the client on completion of the plan. This certainly assists in reducing the overall set up costs of the plan.

 

For further information or quotation on the Just Retirement Roll-Up Lifetime Mortgage, please contact Mark Gregory on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk.

 

Three Reasons Why You Can Still Benefit From A Last Minute Prudential Equity Release Application

Wednesday, December 30th, 2009

As you may be aware Prudential have announced their imminent withdrawal from the equity release market…& time is fast running out. With this in mind we briefly look at their unique scheme features & what effect this loss will have on the equity release  market as a whole.

Prudential have two equity release schemes; lump sum  & increasing cash reserve plan . Within these plans the features are found: –

  • An increasing cash reserve facility which provides a reserve that increases yearly by 1% of the original property value, upto age 84.
  • An equity guarantee that guarantees a certain percentage of your property’s value at the start of your plan, will still pass on to your beneficiaries.
  • Unlikelihood of ANY early repayment charges being applied if the plan is taken out with the current Bank of England base rate at 0.5%

 

Although, certain remaining equity release schemes  can provide a no negative equity guarantee, none of them can offer the remaining two. Therefore, if you have a future requirement whereby you wish for a drawdown plan  that offers a larger long term cash facility then the Prudential Increasing cash reserve plan could be an option.

 

Additionally, if you have a shorter term borrowing requirement, (possibly unsuccessful sale of property in the current climate) the Prudential equity release plan, with its unlikely NO early repayment charge scenario also could be an option. So, if these features are of interest & you are considering releasing equity from your property, what are the deadlines for last minute applications?

 

  • Last date for quote requests is 31st December 2009
  • Last date for applications which must be supported by a quote is 15th January 2009
  • All applications must be completed by 31st March 2009

 

For last minute queries & illustrations please ring immediately on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk

 

Prudential Set To Withdraw From Selling Equity Release

Tuesday, November 24th, 2009

Prudential has announced to the industry that it will withdraw from writing new equity release business in the New Year. The insurer will however continue to maintain the current service standards to its existing 14,000 customers.

 

As reported in earlier newsletters on this site, this follows a trent set in 2009 of other equity release providers pulling its equity release schemes – notably Coventry Building Society (Godiva), Saffron Building Society, Retirement Plus & Northern Rock.

 

However, the Prudential’s announcement is the first major casualty in the specialist equity release market  & may come as a concern. Launched in 2004, Prudential  had innovative products & backed by its strong household brand name. Their market share had been 23% in 2008 & 12% of the equity release market in 2009, with total lending amounting to around £1bn.

 

They have stated that the mortgage book always was planned to be securitised, however with current market conditions this course of action was stemmed. Barry O’Dwyer who is Managing director of retail life and pensions stated that he does not feel this securitisation market to return potentially for another five years.

 

Other factors Prudential have sited are the up-front costs of equity release provision being too high against the payback period for the capital. Prudential now feel this cash is better deployed to other product areas of the business.

 

Remaining companies in the market will surely address their positions in light of this. The major providers now left being Aviva , Just Retirement , LV= , Hodge Lifetime , Stonehaven  & the home reversion companies of Bridgewater  & Home & Capital .

Therefore, anyone considering the Prudential equity release plan must act soon! For a summary of their products and rates please click on the following link…Prudential Equity Release Plans.

 

Equity Release Supermarket still have a special offer with the Prudential which includes a free valuation & £300 cashback on completion.

 

If you have any queries or an existing customer please contact Mark Gregory on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk

 

 
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