Posts Tagged ‘Roll up lifetime mortgage’
Friday, January 27th, 2012
With the latest round of equity release rate reductions, it seems both Aviva & Just Retirement are vying for top spot.
Currently, Just Retirement lead the way with their round of reductions a few weeks ago at a market leading 6.2% annual rate.
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However, Equity Release Supermarket have been notified that with effect from next week the Aviva flexi drawdown plan is set to become the market leader again by usurping Just Retirement with a reduction of 0.12% to a new market leading rate of just 6.1% annual rate.
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Mark Gregory – Director & founder of Equity Release Supermarket comments – “This is excellent news & the price war has been long awaited. Equity release interest rates have been in the doldrums recently compared to mainstream interest rates. We are getting back to rates from a few years ago & that sub 6% barrier is now not too far away. This new Aviva rate is exclusive with further benefits of a free valuation & an excellent £500 cashback on completion for the client. With gilts rates so low at present, now is as good time as any to be considering taking out an Aviva Equity Release plan.”
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Equity Release Supermarket are one of the leading independent equity release advisory firms in the UK currently & can be found on their informative website http://www.equityreleasesupermarket.co.uk.
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If you require information on the new Aviva Flexi deal please call 0800 678 5159 where one of the equity release team would be willing to assist & provide further details.
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Tags: Aviva, drawdown equity release, equity release, Equity Release Adviser, Equity release interest rates, equity release schemes, Equity Release Supermarket, Just Retirement, Roll up lifetime mortgage
Posted in Equity Release, News | No Comments »
Tuesday, October 18th, 2011
An increase in the standard of living & more recently inflation levels has caused a shortfall in pension provision. This is now affecting all those people who are on the verge of, or now in retirement. So for those retirees who are on fixed incomes, how can they allay their fears of personal budget shortfalls?
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Well consider equity release schemes as an effective solution to this problem. If you are looking for some more information, this guide will help you understand the lifetime mortgage schemes available.
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What is an equity release scheme?
Equity release schemes allow you to release equity tied up within your home. These schemes are very popular amongst individuals who are entering, or now into the retirement phase of life. Thus, retirees can therefore overcome any shortfall in their income by utilising the tied up tax free cash within the value of their home. Equity release schemes provide pensioners with a steady flow of income thereby helping them to maintain and improve their quality of life. Additionally, in recognition of the demand for irregular tax free cash, drawdown equity release schemes can now provide flexibility.
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Equity release is used to cover financial products that release home equity. However, they need not require any monthly payments & therefore do not affect retirement budget. It is very important to keep in mind that equity release schemes can only be considered for people who are above 55 years of age. For home reversion schemes this minimum age is increased to age 65 in lieu of the manner these schemes operate.
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Lifetime mortgage plans are becoming increasingly popular amongst retired individuals. They provide a lump sum amount based on a combination of the age of the youngest homeowner & the property value.
The younger this age is, the lower the loan-to-value.
In contrast for those more elderly can release a percentage of the property upto 54%.
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A few other benefits of SHIP (Safe Home Income Plans) equity release schemes are:
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- Improved standard of living
- Portable mortgage to another property
- A fixed rate of interest for life
- No monthly payment or instalments required
- No negative equity guarantee
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Equity release is an ideal option when it comes to securing your future. If you find the process confusing, it is highly important to consult an equity release advisor such as Equity Release Supermarket. With access to market leading deals & special interest rates they can research the whole of the equity release market to find the best equity release deal available.
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If you require advice on which equity release is suitable for you, contact the Equity Release Supermarket team on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk
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Tags: drawdown equity release, equity release, Equity Release Adviser, equity release schemes, Equity Release Supermarket, home reversion schemes, No negative equity guarantee, Roll up lifetime mortgage, SHIP
Posted in Equity Release, Interest Only Lifetime Mortgage | No Comments »
Friday, June 17th, 2011
Equity release is used as a term for schemes that help a homeowner to secure a good amount of money from their main residence. These schemes provide homeowners with an option to use their property to release money. It becomes hard for people who retire after a certain age and do not have funds to support their needs. Equity release schemes provide an option for people who live on pensions and are unable to support themselves or maybe wish to increase their lifestyle options with a new car or holidays. It therefore helps provide an extra flow of money to fulfil their needs & retirement enjoyment.
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Equity release has become very popular among citizens who are over the age of 55. There are an increasing number of retirees opting for these equity release solutions. Equity release UK schemes offer retirees an opportunity to generate money from their property, either a lump sum amount, timely earnings, or in some cases, both. Retirees can remain living on their property unless they decide to move out at which point the equity release plan becomes repayable. The equity release providers will usually require repayment of the balance within 12-18 months by the beneficiaries. This gives the executors of the estate plenty of time to achieve the best sale price on the property to cover the debt & maximise the inheritance for the beneficiaries.
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The value of your property and your age are the key factors in the data used in equity release calculator formula. There is no age limit as far as equity release is concerned. The older you are, the more you can generate out of your property. This scheme is accessible for people who are over fifty five years and own their property which usually should be of standard construction & freehold, or leasehold with more than 75 years left remaining on the lease.
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Halifax Retirement Home Plan is one such scheme which helps people to extract money out their property. It is a type of interest only equity release lifetime mortgage plan where the borrower pays a sum of money to the lender on a monthly basis. It is a useful and easy plan which suits the needs of all perfectly. As mortgages for pensioners seem to be difficult to come by, the Halifax equity release scheme has become a breath of fresh air to many people in retirement. They can be safe in the knowledge that the balance will not increase as long as the payments of monthly interest are maintained.
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This is an interest only lifetime mortgage which means there is no set term & these equity release schemes will run for the rest of their lives. As long as too much equity is not taken from inception on the Halifax Retirement Home Plan then if there comes apoint in the future that the monthly payment should cease, then repayment by a roll-up equity release plan could always take effect.
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There are many options today that assist pensioners to take equity release from their property, however to ensure which scheme is the correct one for your circumstances contact a professional & qualifies advisory service.
Award winning Equity Release Supermarket have advisors local to you who can provide quality & friendly service to guide you through the equity release decision making process.
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Call the equity release team today on 0800 678 5159 for your free initial consultation.
Tags: equity release, Equity Release Adviser, Equity release calculator, equity release schemes, Equity Release Supermarket, halifax equity release, Halifax Retirement Home Plan, lifetime mortgage schemes, lifetime mortgages, pensioner mortgage, Roll up lifetime mortgage
Posted in Equity Release, Halifax Retirement Home Plan | No Comments »
Sunday, December 12th, 2010
It is only normal for people to want an adequate income to support themselves in financially uncertain times, such as the present.
Unfortunately, not everyone can get access to this income easily, especially homeowners who have retired. Having been on employed income for most of one’s life & then seeing a drop in income can be daunting. The good news is that the FSA has permitted ways for homeowners who have retired to gain additional income or capital lump sums through the equity in their homes.
The result of this is equity release, where homeowners over 55 years of age can gain income from the value of their homes.
There are different equity release schemes from which homeowners can choose depending on their preferences. Here are some of the schemes offered to homeowners through equity release.
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Lifetime mortgage – This equity release scheme involves arranging monthly income or getting a lump sum from the equity of your home. Once the equity has been released. there are NO monthly repayments to make with these type of plans. The interest is instead rolled-up & added to the balance on a yearly basis, escalating to the extend of roughly doubling the balance every 10-11 years.
Home equity release therefore has the effect of reducing your beneficiaries inheritance & as a consequence it is always advisable to involve your children in the equity release process & decision making.
At the end of the term of the mortgage term, which will once the second person has died or gone into long term care, the lender can use their calculator to ascertain the redemption figure. The loan is then repaid once the property has been sold which most equity release UK companies will allow 6-12 months for this to happen. Therefore, even in today’s depressed property market there should be ample time for the property to be sold at the best price possible.
Depending on the equity release interest rate & how much was originally borrowed will determine the final balance to be repaid.
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Home revision – with this scheme, the reversion company will actually buy a share of a property. This can be anywhere upto 100% of the property value. In the meantime, a lifetime tenancy agreement is made which allows you to live rent free for the rest of your life. (This must NOT be confused with non-regulated sale & rent-back schemes which do not offer this feature). You make an agreement with the home reversion provider to keep the property in good condition for the duration of the term.
At the end of the day, (death or long term care) again the property will be sold. The amount the reversion company will require will be the percentage that was sold to them. Therefore, if 75% of the property value was sold to the reversion company, then 25% of the sale value will be retained by the homeowner. This has the major advantage over roll-up lifetime mortgage schemes in that your beneficiaries will know exactly what amount of the property value they are to receive.
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Shared appreciation mortgage – There are some lifetime mortgage schemes that allowed homeowners to share the increase in home value. This can make a huge difference to the final outcome in a time of quickly increasing house prices. These plans are no longer sold & were withdrawn in the 90′s. Such schemes do still exist are subject to review.
The worked by instead of charging interest for the loan, the bank could usually take anywhere up to 75% of any house price rises over the life of the mortgage. However, house prices escalated significantly over the next decade & meant that people who took out these plans ended up owing the banks hundreds of thousands of pounds.
Despite house prices falling over the past 18 months, the average house price has still risen by over 100% from the late 1990′s, to date. This has left many elderly borrowers unfortunately marooned in their homes. The reason for this is that any reason for them selling the property, such as a move into residential care, would trigger a massive payout to the shared appreciation mortgage lender leaving people with no funds to move forward. Companies such as Barclays & Bank of Scotland were the main protagonists in this equity release arena.
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Before entering into any equity release scheme, always seek independent financial advice.
Call freephone 0800 783 9652 to speak to one of the Equity Release Supermarket team.
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Tags: equity release, equity release schemes, home reversion, home reversion plans, home reversion schemes, income plans, Roll up lifetime mortgage, shared apprecaition mortgage
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Wednesday, December 1st, 2010
On a daily basis we get serious financial queries from people looking to alleviate their money woes in retirement. This could be due to a number of lifestyle issues,; perhaps due to a lack of pension provision over the years, divorce, business failure, the list is endless.
However, to all these scenarios equity release can potentially be a saviour in one way or another. This is why it is so important that advice from a qualified equity release adviser is sourced.
From an equity release advisers point of view it gives us most pleasure to see how life changing equity release schemes can be to clients & the benefits they bring.
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Equity release is specifically designed for homeowners who want to release capital against their homes. If you have a situation that requires a capital lump sum to resolve the cash flow problem, then equity release schemes may be the solution.
However, which is the right equity release depends upon your requirements & attitude towards your beneficiaries.
In general, all equity release schemes will provide some form of tax free lump sum, but it is the method of its withdrawal that will determine the most appropriate equity release scheme that is correct for you.
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Criteria to qualify for equity release
If you want to opt for equity release then the youngest age of the homeowners must be over 55 years of age. In addition to this, your main residence must be worth a minimum of £60,000 & if any secured debts are outstanding on the property, then they must be repaid at completion of the new equity release plan. Therefore, unless there are savings to cover the repayment of the mortgage, then sufficient funds need to be raised on the new equity release plan to redeem the existing mortgage.
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How much equity can you release?
The cash lump sum received depends on various factors. These include your age, the value and your health situation. The scheme you choose can also affect the amount of receivable money. The older the age of the applicant, the greater the potential equity release available. The higher releases are often found on home reversion schemes which is where you sell a percentage of the property to the home reversion company.
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Is the money tax-free?
Yes, the lump sum money which you will receive against your home will be tax-free as it is classed as a withdrawal of capital. However, what happens to these monies next will determine whether these equity release funds remain tax free.
Once, the tax free lump sum is received from the solicitor & placed into the clients bank account, then if you are a basic rate taxpayer or higher, then you will be taxed at source on the interest generated. If you are a non-taxpayer then remember to have Inland Revenue form R85 completed, which will allow the bank or building society to pay interest with NO tax deducted.
The fact the equity release cash lump sum is tax free on receipt means that the funds should go further long term & allows you to spend the cash in various ways. The list for this is endless but most popular prove to be debt consildation, home improvements, buying a new car or go on a holiday or pay off outstanding debts.
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Will you own the property?
If you have opted for a lifetime mortgage scheme, then the property will still be 100% yours, albeit the equity release company will have placed a legal charge on the property & lodged it with the land registry. This protects the provider in that when the property is eventually sold, they will have first bite of the cherry & recieve the original cpaital borrowed, plus compounded interest to that date.
In the case of home reversion plans, the whole or a part of your property will be owned by the lender. Therefore, dependent on how much of an equity release cash lump sum is required, will determine the percentage of the property that needs to be sold. This could be as little as 10% or even as much as 100% of the total property value. Obviously, if 100% of the property is sold then you will forfeit certain rights. These would include there being NO inheritance to pass onto any potential heirs, no equity to negotiate on if you want to upgrade to another property & you will require the home reversion company to approve any building work or changes to the property you require.
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Please think carefully before entering into any long term equity release mortgage arrangement. The equity release market is highly regulated by the financial services authority (FSA) with advise not only coming from an mortgage specialist such as Equity Release Supemarket, but also from a legal representative which will ultimately by your solicitor.
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To discuss your equity release options further & to request a free initial NO obligation financial planning service meeting, then contact the Supermarket team on 0800 783 9652 or email admin@equityreleasesupermarket.co.uk
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Tags: equity release, Equity Release Adviser, equity release schemes, home reversion, home reversion schemes, impaired life, lifetime mortgage schemes, lifetime mortgages, Roll up lifetime mortgage, SHIP
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Monday, November 29th, 2010
Equity release is a scheme which is designed to assist retired homeowners release some money against the value of their homes. If you find it difficult to live with small pension, possibly even benefits and little savings then equity release is an ideal option for you. Once you have opted for equity release then the eventual repayment will be done after your death or when you move to long term care. This is the time at which beneficiaries will be in receipt of their inheritance.
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Today, two different types of equity release schemes have been introduced to the market. These include home reversion plans and roll-up lifetime mortgages.
Many homeowners opt for lifetime mortgages because they offer great benefits.
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Two types of lifetime mortgages: -
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Roll-up lifetime mortgages – These equity release schemes are specially designed for those who want to release equity without paying monthly repayments. The amount that can be released is based on the age of the youngest applicant & the property value.
The younger the age, the lower the equity release sum that can be released. The reason for this is down to life expectancy, as lenders do not want to release too much at a younger age due to the roll-up of interest. With average life expectancy of a 60 year old now reaching beyond 80, lenders must err on the side of caution. The reason being that they do not want the equity release balance to reach beyond the property value in the future. This would cost them dearly as the no negative equity guarantee would then need to be invoked.
The mechanics of the roll-up lifetime mortgage means that the interest will be compounded monthly or annually & re paid eventually along with the original capital on the eventual sale of the property. Another important feature of these equity release schemes are that they allow you to maintain 100% ownership of the property.
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Interest only mortgages – This is one of the unique schemes which allow homeowners to release equity and repay monthly interest only. This means that the monthly repayment must be affordable on their retirement incomes. Such equity release schemes such as the Halifax Retirement Home Plan are few & far between as there are not many mortgage or equity release companies that offer finance to the over 65 age group.
Nevertheless, Equity Release Supermarket have unique access to such schemes & their team of friendly equity release advisers can identify which is the most suitable scheme dependent on your personal circumstances.
Interest only mortgages such as those offered by Halifax, will maintain the same balance from start to finish & therefore can guarantee how much of your estate will be required to settle with the lender at the end of the term. The balance will only be repaid after your death by selling the property. This will be carried out by the nominated executors who have been appointed in your Wills.
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If you have a question on whether a roll-up or interest only mortgagee is right for you contact the Equity Release team free on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk.
Tags: equity release, Equity Release Adviser, equity release schemes, Halifax Retirement Home Plan, home reversion, lifetime mortgage schemes, lifetime mortgages, No negative equity guarantee, Roll up lifetime mortgage
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Friday, November 19th, 2010
Lower pension incomes and high living costs have resulted in retired people looking for different financial solutions to make ends meet.
Due to these issues, more and more retired homeowners are turning to equity release schemes for an additional source of income. Equity release allow homeowners to use some of the cash tied up in their homes and get a tax free lump sum. They are also permitted to continue living there rent free & in the case of lifetime mortgages with 100% ownership to.
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Additionally there are other advantages gained from equity release schemes.
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- No need to move – One of the best things about equity release schemes is that homeowners do not have to worry about moving out of their homes when they sign up. In the case of roll-up lifetime mortgages the plan holder retains 100% ownership of the property & can remain there until the second person has died or moved into long term care. With regards to the second type of equity release – home reversion plans, the planholder retains the portion of the property they do not sell to the reversion company.
- Inheritance protected equity release products – Another benefit of these schemes is that homeowners can now choose whether or not they want to guarantee a certain percentage of their home. This means that they can still be sure there is some equity left for their beneficiaries. This can therefore form part of a gift of their inheritance.
- Supplementary income – More than 50% of retired homeowners have wealth that is tied up in their property. For this reason, many choose home equity release schemes to gain additional income. This retired people to meet daily expenses & assist with the day to day costs of living in today’s retired environment.
- In all cases, homeowners can move home during the term of their equity release schemes. However, they have to notify the equity release company. The reason for notification to the lender is that the equity release planholder has two choices. Firstly, they have the option of porting the equity release scheme over to their new property. The new property would have to meet the lenders property criteria, however it can be transferred with no early repayment penalty. Secondly, the scheme can be repaid in full, thuis removing any future equity release liability. You would therefore need to bear in mind any potnetial early repayment charges.
As equity release schemes can be rather complex, it is best to have a professional explain and oversee the process. All Equity Release Supermarket advisers are authorised by the FSA & the equity release schemes they advise on are all SHIP members.
The Equity Release team will provide independent financial advice & research from the whole of the equity release market.
To gain from their experience, please call freephone 0800 678 5159 or email mark@equityreleasesupermarket.co.uk
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Tags: equity release, Equity Release Adviser, equity release schemes, home reversion, home reversion schemes, inheritance protection, lifetime mortgage schemes, lifetime mortgages, Roll up lifetime mortgage
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Thursday, October 14th, 2010
Signs that the equity release market is beginning to spark into life again, can be evidenced by the re-emergence of a former lender in the market.
more2life have joined forces with annuity specialist Partnership assurance to re-launch their impaired life roll-up lifetime mortgage plan.
Incorporating an impaired life facility & protected equity guarantee, the more2life equity release plan can be seen to be opening a niche market for itself. The impaired life facility means that depending on health & lifestyle, a higher than normal tax free lump sum can be achieved, should serious health issues be present.
The more2life equity release plan has been designed with three scenario’s in mind: -
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- Enhanced plus – industry leading maximum release, impaired life product
- Enhanced protected – impaired life plan with ‘protected equity guarantee’
- Protected plan – older applicants looking for a ‘protected equity guarantee’
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Pitching the enhanced plus plan at the maximum release end of the market means that should the applicant qualify on medical grounds, they would have the highest equity release lump sum currently available. This would even surpass the current Aviva Lump Sum Max product, although this would be at the expense of a higher interest rate with more2life.
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The following percentages are the maximum releases available on the Enhanced Plus: -
Age 55 23%
Age 60 28%
Age 65 33%
Age 70 38%
Age 80 48%
Age 90+ 54%
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For example, an applicant aged 65 with a property valuation of £250,000 & meeting the underwriting criteria, can release a maximum of £82,500 on the enhanced plus plan.
The interest rate for this product will be 7.49% monthly.
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The second product – ‘enhanced protected plan‘ is also based on health & lifestyle grounds & again can provide an enhanced lump sum. However, to qualify for this equity release scheme the health situation will not be a serious as the enhanced plus. The interest rate for this plan is lower at 6.99% monthly.
Another feature of this plan is the ‘protected equity guarantee’ which is included & guarantees a percentage of the property for the children/beneficiaries on the eventual sale of the property.
The guarantee works as follows: -
Should the overall facility available be £80,000, yet only £40,000 is taken, then 50% of the final sale value will be protected on sale.
This can be an essential tool for applicants who wish to ensure that a guaranteed inheritance is passed onto their children.
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The final option is the ‘protected plan’ which has no impaired life facility , but does include the protected equity guarantee. The interest rate is the same as the enhanced protected at 6.99% monthly.
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In summary, depending on whether the maximum lump sum is being sourced, or one is looking to take equity release but still guaranteeing an inheritance for their children, then one of the three more2life equity release schemes can benefit.
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If any of these more2life plans would be of interest to you, please ring the Equity Release Supermarket team on 0800 783 9652 or email mark@equityreleasesupermarket.co.uk
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To request a quote on the more2life enhanced plans please click here.
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Tags: equity release, equity release schemes, impaired life, inheritance protection, lifetime mortgages, maximum lump sum, more2life, protected equity guarantee, Roll up lifetime mortgage
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Thursday, September 16th, 2010
Equity release is a plan which allows the homeowner to release some amount of cash against the value of their home. If you are over 55 and own a home worth more than £60,000 then equity release is an ideal solution for you. Although you receive money against your home, there is no need to move & no monthly payments.
The amount of cash which you can release against your property depends on the age of the youngest person on the deeds and the current value of your property. To find out how much you can release, you can use the online calculator.
You can ascertain the maximum release possible by using the equity release calculator & clicking here.
One of the best things about equity release is that it offers tax-free money. This means that you can use all of this cash in whichever way you want.
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Due to different financial needs, two different formats of equity release schemes have been introduced.
• Lifetime mortgage schemes
• Home reversion plans
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The above mentioned schemes offer different features, so you can opt for the one which suits your requirements. Lifetime mortgages are further categorised into different types such as roll up mortgages and interest only mortgages. Roll up mortgages are preferred by most homeowners these days & account =for approx 90% of all equity release plans completed.
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Roll up lifetime mortgages
By opting for this equity release scheme, you can keep a lump sum and forget about any monthly the repayment. The best thing about this scheme is that the interest is compounded year on year and paid eventually by selling the property.
The process of releasing equity is complicated, so it is recommended to equity release expert, such as a member of the Equity Release dept. who will guide you in choosing a right option.
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To discuss equity release & its implications, please contact Mark Gregory on 0800 783 9652
Tags: equity release, Equity release calculator, lifetime mortgages, Roll up lifetime mortgage
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Monday, September 13th, 2010
Are you facing financial problems? If your answer is yes, then equity release schemes may be the perfect option for you. These schemes are specially planned for elderly people to release some cash against their property’s value. There are various equity release schemes offered by financial institutions.
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Two of the most popular equity release schemes are lifetime mortgages and home reversion plans. By opting for home reversion plans, you can sell all or a part of your property to the equity release company.
On the other hand, lifetime mortgages are categorised in three different types.
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• Roll-up lifetime mortgages
• Fixed repayment mortgages
• Interest-only plan
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Of the above mentioned schemes, the roll-up lifetime mortgage scheme is preferred by many homeowners these days.
However, here we feature one of the less common equity release plans: -
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Features of a fixed repayment mortgage
Instead of interest, you have to pay a fixed amount of money which is higher than the original borrowed money. The repayment money is agreed in advanced with the lender. You do not have to worry about repayment money because it is done when your home is sold.
To choose an equity release scheme which suits your requirements, you should always employ the services of an independent equity release advisor such as the team at Equity Release Supermarket, whom have over 30 years equity release experience.
They will guide you. In essence they will ascertain your current situation, gather details of your finances & dicuss your options.
These will include looking at any alternatives prior to explaining & advising on equity release: -
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- Downsizing
- Interest only mortgage
- Using any savings or investments
- Asking relatives for financial assistance
- Seeking any entitlement to state benefits
- Taking on a lodger
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Once these avenues have been explored the adviser will make their recommendation. This will involve running through a specific Key Facts Illustration (quote) & explaining the pro’s & con’s of the particular product.
Should this be to the satisfaction of the client then the relevant paperwork can be completed by filling out the required documents.
Most equity release schemes offer three payment options. You can get a lump sum or regular monthly income. You can also opt for a combination of both these methods.
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For additional information on the alternatives to equity release contact your local Equity release supermarket financial adviser on 0800 783 9652 or email admin@equityreleasesupermarket.co.uk
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Tags: equity release, equity release schemes, Fixed lifetime mortgage, lifetime mortgage schemes, lifetime mortgages, Roll up lifetime mortgage
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