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The Many (Sometimes Unusual) Reasons to Release Equity from Your Home

Monday, October 14th, 2013

Unusual reasons to release equityDuring my 10 years as a Lifetime Mortgage specialist I have come across a plethora of reasons to make genuine use of equity release schemes. There are the most obvious and popular reasons such as remortgaging and debt repayment; but there are also some that aren’t so obvious.

 

Equity Release Case Study #1

One that springs to mind is a case whereby I helped an individual back in 2007. This was a 74 year old male who lived in South Cheshire. The situation was terribly sad, but not without hope and possible happiness on the horizon.

 

His only child had been his son, who had unfortunately died a few years previous in a car crash. To compound matters further he had sadly lost his wife within the last 6 months of our meeting. Their greatest pleasure when they were together, was to go on cruises around the Mediterranean and Caribbean which they could fund from their regular income.

 

Following on from these unfortunate events, he re-evaluated his retirement plans with a positive outlook. He therefore decided that his life would now be split between 6 months at home and 6 months cruising, and it was now just a case of being able to finance his revised situation.

 

He decided he would like to raise a total of £150,000 by releasing equity after calculating that figure would cover his costs for the next 10 years.

 

I therefore arranged a flexible drawdown lifetime mortgage, with just an initial £15,000 and a large enough cash reserve facility that he could then draw upon, as and when required. This suited him perfectly and for a couple of years at least, I got postcards from around the world. The drawdown lifetime mortgage plan was his ideal plan and met his requirements not only now, but also into the future when further cruises and retirement expenses would be required.

 

That’s what we, at Equity Release Supermarket call an aspirational equity release case. That is one that helps someone to attain their goals in life and we are only too happy to help advise on such cases.

 

The other side of the coin is a needs based equity release case. This is where there is an urgent need to raise equity in order to stave off potential severe financial repercussions such as mortgage repayment, insolvency or even bankruptcy.

 

Equity Release Case Study #2

From my experience, such a case was with a 68 year old lady in North Derbyshire who had accumulated personal loans and credit card debts amounting to over £80,000. The strange part was that these were from gambling regularly on the Canadian Lottery of all things. Her family had contacted us to see if we could help which indeed we could. However, in order not to fall into a similar trap, I advised the family to remove or better still destroy her credit cards.

 

In circumstances like this, equity release schemes can act as an almost immediate relief from stress and worry and several times over the years I have had a letter from the client’s family. This provided me with personal satisfaction as they were thanking me for my considerate actions and telling me how not only does the client feel and look better, but I may have also added another few years to his life expectancy.

 

Being an lifetime mortgage adviser can sometimes transform people’s lives for the better and is one of the many reasons that I feel so passionately about the equity release marketplace I work in.

 

These are just two case studies whereby I have been able to assist retirees with their financial issues in retirement. Have it be known they are two relatively extreme cases, but I use them to show the diversity of reasons for using lifetime mortgages.

 

The reason I have been exclusively involved with equity release schemes for the last 8 or 9 years and intend to stay so until I retire, is because of the instant reaction to either attain the wherewithal to achieve ones goals, or to remove the stress and strains of financial problems in retirement.

 

About the author

Barry Adnams is the author of this article. Barry is one of the most experienced equity release advisers at Equity Release Supermarket, having previously worked as an adviser & manager at NatWest/Royal Bank of Scotland Equity Release.

 

Having worked with RBS Equity Release in 2005, Barry has much experience in dealing with retirees financial situations and is fully aware as to the importance that a release of equity can be. Barry endeavours to meet all his clients face-to-face, if not only for a cup of tea!  Dealing with his many clients this way enables Barry to discuss both the pros and cons of equity release and is always open to family members being present at such meetings.

 

If you wish to discuss anything in relation to Barry’s articles or any general questions about lifetime mortgage or home reversion plans, then please contact Barry Adnams at Equity Release Supermarket, on 07989 281108 for a free initial consultation.

 

Alternatively, Barry can be contacted by email at barry@equityreleasesupermarket.co.uk.

 

To evidence the quality of Barry’s advice & feedback from his clients please check his testimonials on the Feefo link on the homepage (bottom right corner).

 

Home & Capital Increase Lending on Home Reversion Plans

Friday, July 2nd, 2010

Good news is back in the equity release market as Home Reversion Plan provider Home & Capital  increase on two fronts the amounts they will lend on their products.

 

Recently there has been a reduction in the number of equity release schemes available in the market which has resulted in fewer options for those in need of cash for their retirement plans.

Therefore news that Home & Capital are reversing this trend with its home reversion plans is excellent news.

 

The latest calculations now show that for a male aged 70 the home reversion rate has now increased from 43.25% to 47%. That’s a healthy increase on the amount Home & Capital will lend & represents a good increase on the equity release scheme funds clients will receive.

 

Secondly, all Home & Capital reversion plans have had an increased the ceiling on the maximum amount customers can raise.

This has now risen by over 41% from its previous maximum of £85,000 upto £120,000.

The maximum percentage of the property you can sell with Home & Capital home reversion plans is 95%.

Existing offers on the Home & Capital reversion plans will continue. This includes no arrangement fees & a special offer of a free valuation on all applications made before 31st July 2010.

The minimum age for the home reversion plans  is 65+.

 
These increases come at a time when retired people who wish to consider equity release are being hit on most sides.

Lower interest rates on their savings coupled with the impending increase in VAT will all affect the elderly population greatly over the next 12 months & beyond.

Therefore, there is some light at the end of the tunnel for the elderly who need financial assistance & a supplement to their capital or to boost income.

 

With property values showing a steady, yet unspectacular increase since the start of 2010 many people in retirement can be sitting on a large amount of equity that can be utilised.

People are increasingly beginning to embrace the idea that their property is a legitimate asset that can be used to release equity – either via downsizing or via equity release schemes.

 

To discuss your equity release requirements further please contact Equity Release Supermarket on 0800 678 5159 or email – mark@equityreleasesupermarket.co.uk

 

 
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