Posts Tagged ‘Roll up lifetime mortgage’
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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Saturday, September 11th, 2010
Over the last few years, there has been a rise in the number of people opting for equity release. The main reason for this is that these schemes provide a financial boost for those who have retired. This income is usually paid by either a tax free lump sum or regular income & can be used for any purpose. But while equity release schemes can be beneficial, there are a few things that they can affect.
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The can have an impact on benefits – These benefits are state income such as pension savings credit, council tax benefits and pension credit which can all be affected by equity release schemes. In fact, drawing too much equity can result in a reduction of benefits. However, you can avoid this by having a certified equity release adviser such as Equity Release Supermarket run through the calculations regarding specific details.
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Compounded interest – Starting an equity release scheme when you are 55 and living a long fruitful life could result in lack of equity in the property later on. This is because interest is added to the amount, which unlike a conventional mortgage is paid off. Therefore, with the interest rolling up will lead to an ever increasing repayment on eventual sale of the property. The good news is that this can be avoided through the No Negative Equity guarantee which must be prevalent in order for the scheme to be a member of the trade body - Safe Home Income Plans (SHIP). They insist that any equity release scheme provider MUST ensure the amount owed is never more than the home value.
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A large lump sum – Most people prefer to take a large lump sum at outset of the plan. But you should be aware that the larger the initial amount, the more interest that will accrue in the long run. Fortunately, this can also be avoided if you consider a drawdown facility in the equity release schemes. This will enable you to take the equity release in smaller amounts as & when required. The benefit of this is that only as much as is required for the first 12 months need be taken. Consequently, less interest will be charged leaving a greater amount of equity for the future. This would not only benefit the plan holders as they will have more equity left in the property to potentially withdraw in the future, but also a greater inheritance for the beneficiaries.
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Following these three points can make equity release schemes much better for homeowners who are short of income or have lump sum capital requirements.
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If you have any questions on how equity release can affect means tested benefits or how drawdown equity release can benefit you please contact Mark on 0800 783 9652.
Alternatively, please email mark@equityreleasesupermarket.co.uk.
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Tags: drawdown equity release, equity release, equity release schemes, No negative equity guarantee, Roll up lifetime mortgage, SHIP
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Tuesday, August 31st, 2010
Some people will be unsure how to begin the equity release procedure. Anxiety with proceeding with this form of borrowing could result in never receiving benefits from this excellent form of lifetime mortgage. Similarly, they also fail to consider certain important points which form an integral part of equity release schemes.
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Equity release is basically the method of utilising the current value of your property to get a steady supply of cash. The cash may be received in a lump sum or in instalments.
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Age is usually the major decisive factor while deciding the percentage value of the home which can be released. For instance, an older person looking for equity release is allowed to release a higher percent value of their home. However, a younger person will not be allowed to release the same value.
The following are some important points to mull over when opting for equity release:-
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Age – As mentioned, age plays an important role while determining the percentage value of the home which can be released. Keep in mind that there is no maximum age limit as such when it comes to determining the percentage. For instance at age 55 which is the youngest possible age for equity release, themaximum release is currently 19%. As the age increases, so does the percentage.
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As a consequence, the following are examples of maximum releases possible relating to a roll-up equity release scheme: -
Age 55 – 19%
Age 65 – 29%
Age 75 – 40%
Age 85 – 48%
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Regulation - Lifetime mortgages and equity release are regulated and monitored by the Financial Services Authority. This came into effect after adverse publicity with regards to older equity release schemes which were the fore runners to todays plans. Therefore, in 2004 the lifetime mortgage market became regulated under the Financial Services Authority (FSA). Home reversions followed later & became regulated in 2007.
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Choosing an equity release plan- If you are choosing an equity release plan, keep in mind that it should have a no negative equity guarantee. This is a requirement of SHIP (Safe Home Income Plans) that any equity release scheme currently a member must have this feature present within the plan. The no negative equity guarantee provides security that on eventual repayment, be it on death or long term care, the value of the debt can never exceed the property value.The worst case scenario would be that no equity will remain for the children, however at the same time no debt can be incurred.
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Consideration of the above mentioned factors will help you immensely when choosing an equity release plan.
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To discuss any of the features described above, or to ascertain how much you can borrow please call one of our equity release specialists on 0800 783 9652.
Altenatively, you can email mark@equityreleasesupermarket.co.uk
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Tags: equity release, equity release schemes, home reversion, home reversion schemes, lifetime mortgage schemes, lifetime mortgages, Roll up lifetime mortgage, SHIP
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Wednesday, July 28th, 2010
Would you like to have a secure and enjoyable retirement?
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If your answer is yes, then an increasingly effective option for the over 55′s is using equity release schemes.
We all have different financial needs & the more recently developed equity release schemes are designed to meet these requirements. These schemes are incorporated within the lifetime mortgage schemes and reversion plan product range.
From this selection the roll-up lifetime mortgage scheme is preferred by the majority of people.
A lifetime mortgage scheme is specially designed for homeowners who are entering retirement and want to release equity from their home as a secured loan. Under this equity release scheme, the repayment takes place on death or the client moving into long term acre.
Once you have opted for this scheme, you can continue living in the same residence for the rest of your life, even if the equity release balance become more than the value of the house. This is due to the inclusion, at no extra cost, of the no negative equity guarantee. This ensures that no debt, over & above the property value can be passed onto the beneficiaries.
Reassurance is therefore given to the children that they cannot incur debt by the actions of their parents.
This rule is a condition of all lenders that are members of the equity release trade body – SHIP (Safe Home Income Plans) who provide consumer protection in the equity release marketplace.
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In Summary
A lifetime mortgage scheme can divided into the following types.
- Roll-up lifetime mortgage
- Fixed payment lifetime mortgage
- Interest-only lifetime mortgage
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Roll-up lifetime mortgage – Under this kind of scheme, you do not have to pay any interest or repayments for rest of your life. The interests will be compunded yearly onto your actual loan amount and it will be paid when the home is sold on death or moving into long term care.
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Fixed repayment lifetime mortgage – In this scheme, there is no interest added to the actual amount but you have to payback a fixed amount when your home is sold. The scheme remains the same even if you sell your home after six months or 25 years, hence it is always important you receive independent equity release advice. This equity release is currently offered by Just Retirement.
The maximum charge that can be secured is 75% of the property value. The value of the overall facility is determined by several factors including your ge, sex, property value & your health & lifestyle situation. Click here to request further details on this unique equity release scheme.
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Interest-only lifetime mortgage – People who do not want the build up & compounding of interest can choose to make monthly repayments of interest only. Using this method, no interest is added onto your main loan as any interest generated is repaid back on a monthly basis.
Before choosing a type of lifetime mortgage, you must consider your post-retirement income and what your needs will be.
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To discuss any of the above issues please contact Mark Gregory on 0800 783 9652 or visit the Equity Release Supermarket website at http://www.equityreleasesupermarket.co.uk
Tags: Add new tag, equity release, equity release schemes, Fixed lifetime mortgage, interest only equity release, interest only mortgage, Just Retirement, lifetime mortgages, No negative equity guarantee, Roll up lifetime mortgage
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Saturday, July 3rd, 2010
Equity release schemes are more commonly & individually known as lifetime mortgages, home reversion or home income schemes. These schemes are the perfect solution to purchase a new car, get funds for a new home improvement project, to pay for a holiday or to simply make your everyday life more comfortable.
Equity release schemes enable you to release money against the overall value of your home. The debt is then repaid from the sale of your property after your death, moving into long term care or earlier sale of the property.
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How do equity release schemes work?
While there are different schemes that offer a lump sum or/and regular income, they work on two principle’s.
The lifetime mortgage schemes provide you a with a capital amount from the value of your home with the amount to be repaid being determined by the interest rate charged & how long the interest roll’s up over.
Home reversion schemes still provide you with a capital amount, however the reversion company takes a percentage of the value of the property in return. Therefore, there is no interest element. Once the property is finally sold on death or long term care, the original percentage sold is retained by the reversion company & the beneficiaries receive the remainder. e.g. if 50% of the property was initially transferred to the home reversion provider, then on the eventual sale of the property there would still be 50% of this value to pass to the beneficiaries.
The minimum age for lifetime mortgages is only 55, whilst the minimum age for a home reversion scheme is 65. The property should must be owned & be in a reasonable condition. If a mortgage exists before inception, then this needs to be repaid from the equity release proceeds or any savings held. The equity release scheme, whether lifetime mortgage or home reversion scheme can be the only secured loan on the property.
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The attractive features of an equity release plan
Equity release plans can offer you a regular income, a lump sum amount or both with the money released being free of income tax. However, if the amount is invested & you are a taxpayer, you may need to pay tax on any interest gained.
In order to unlock equity, there is no need to sell or move your home. Using an equity release scheme, you get assurance that you can continue to reside in your home until you die.
If you do not have any family or children to leave your inheritance to, then an equity release scheme can be an extremely attractive concept.
With the above advantages that equity release schemes offer, it could be the perfect way to unlock your money & enoy a comfortable retirement.
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If yu have any questions on the topics discussed above then please contact the Equity Release Team on 0800 783 9652.
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Tags: equity release, equity release schemes, home reversion, home reversion schemes, lifetime mortgages, Roll up lifetime mortgage
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Sunday, June 6th, 2010
This article provides information on the latest interest rates & changes that Aviva are making to their product range.
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With the current shortage of equity release lenders, additional pressures are mounting on the remaining companies providing equity release schemes.
These lenders are now experiencing larger than normal business volumes as the number of providers has dwindled over the past 12 months. As a consequence some servicing issues are of concern, of which the biggest provider is now addressing.
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Of these equity release companies; Aviva are the first to change their lending criteria & this post provides details of this in advance.
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Come the 14th June, Aviva will be increasing their interest rates & lowering their loan-to-values (LTV) & details of these changes are detailed later in this article.
This is a negative step for the market given that Aviva’s Maximum Cash Release plan offers the highest cash release in the lifetime mortgage market at present.
Therefore, clients looking for financial relief by releasing the maximum possible after this date now have a reduced cash sum available. Couple this with Aviva’s recent reduction in loan-to-values on flats & maisonette’s & there is a definite swing away from higher loan values.
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Aviva will now only lend on 75% of property values on flats & maisonette’s, which is a dramatic move away from lending on these abodes. Couple this with the reductions in loan-to-values which are being announced on the 14th June, means a significant shift in their lending criteria.
This will affect in particular clients looking at debt consolidation or potential other requirements that demand the maximum possible.
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Equity Release Supermarket as independent financial advisers have witnessed firsthand the demand for larger advances this year alone. Predominantly, this has been for debt consolidation purposes whereby clients in retirement are now experiencing income shortfall issues as their investment returns have fallen significantly.
This has resulted in financial pressures meeting these monthly liabilities including mortgage payments, personal loans or more commonly, credit card debts.
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Nevertheless, there are fresh signs within the market indicating that external forces are construing to develop new plans & ideas to drive this stagnant market forward.
We heard last week that More2 Life is introducing an impaired life roll-up equity release scheme. This is welcoming news for the market & hopefully the sign of things to come.
In the meantime the current crop of lenders can dictate in a market having little competition from other providers.
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Part of the result of this is Aviva’s impending equity release scheme changes.
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Aviva have announced an increase of 0.1% to the interest rates for new business on the Lifestyle Flexible Option, Lifestyle Lump Sum and Lifestyle Lump Sum Max.
Equity Release Supermarket receive an exclusive interest rate lower than that offered directly by Aviva themselves.
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The new Aviva interest rates wef 14th June are therefore 6.70%, 6.55% & 7.40% respectively. On paper this doesn’t represent a large percentage increase; however given the roll-up nature of these products, this will result in £1000′s difference in the future balance.
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Additionally, Aviva equity release are reducing the loan-to-values on the Lifestyle Lump Sum Max by 2% for customers aged 60 or below, and by 1% for those over 60.
Even with this decrease, they currently still offer the best LTV scale in the market on all properties (apart from flats & maisonettes).
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The LTV rates for the Lifestyle Flexible Option and Lifestyle Lump Sum will stay the same.
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Example LTV’s on the Lifestyle Lump Sum Max are now: -
Age 55 - 19%
Age 60 - 23%
Age 65 - 29%
Age 70 - 35%
Age 75 - 40%
Finally, there are transitional arrangements in place which anyone considering the Aviva equity release schemes should be aware of;
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Applications on the Lifestyle Flexible Option, Lifestyle Lump Sum and Lifestyle Lump Sum Max dated prior to 14th June and received by the 18th June will receive the old interest rates. Also, any Lifestyle Lump Sum Max applications will be on the old LTV scale.
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Applications on the Lifestyle Flexible Option, Lifestyle Lump Sum and Lifestyle Lump Sum Max dated before 14th June and received after 18th June will receive the new interest rate. Lifestyle Lump Sum Max applications will be on the new LTV scale.
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Applications dated after 14th June will receive the new interest rates. Lifestyle Lump Sum Max applications will be based on the new LTV scale.
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To request an Aviva illustration or further advice on any of the issues discussed above, please contact Mark Gregory on 0800 783 9652 or email mark@equityreleasesupermarket.co.uk
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Tags: Aviva, Aviva Lifestlye Lump Sum Max, Aviva Lifestyle Flexible option, Aviva Lifestyle Lump Sum, equity release, Equity release interest rates, equity release schemes, lifetime mortgages, loan to value, Roll up lifetime mortgage
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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.
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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.
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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.
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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.
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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.
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All is not lost.
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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.
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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 783 9652 or
e: mark@equityreleasesupermarket.co.uk
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Tags: cashback, equity release, equity release schemes, Prudential, Prudential deadline expired, Prudential Equity Release, Prudential Lifetime Mortgage, Prudential offer expiry, Prudential Offers, reduced interest rate, Roll up lifetime mortgage, solicitors, solicitors fees, valuation fee
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Sunday, March 28th, 2010
An increasing phenomenon in later life is the number of couples who are now deciding to divorce.
Often having lived together but had separate lives for many years, retirement then can seem the final straw in their relationship. Perhaps the knowledge of the impending hours of greater social time together once retirement arises is the most common reason!
Nevertheless, statistics show increasing numbers are deciding to end their marriages in retirement and move on, once their children have left home.
This works well for many people, but one of the major problems of divorce in retirement is dividing assets when you are approaching or have reached the end of your earning power.
Someone who was set for a comfortable retirement as part of a couple may well be struggling as a single person on half the assets. The marital home is often a bone of contention because it is usually the most valuable asset and often represents stability and security to the occupants.
However, pensions can also create many issues & this will be discussed in a separate article including pension sharing on divorce with offsetting & earmarking being the methods of distribution.
With reference to the marital home, equity release can often help in these situations.
The person who remains in the marital home can release cash from the value of the property either by a lifetime mortgage or a home reversion plan to ensure that the spouse receives their share of the property.
In most cases, it would not be possible for the person living in the marital home to take out a conventional mortgage because they may not have enough income to support it. However, by taking out a lifetime mortgage or a home reversion plan, they know they can stay in their home for life without having to make repayments during their lifetime.
‘A house is not a home’ may be easy to understand in normal circumstances but in the context of divorce, particularly from a woman’s point of view, a home is where you nurture and provide for those you love and care for and where you feel secure. Divorce is a traumatic time when normal life is disrupted. If it’s possible to maintain some security by doing a lifetime mortgage or home reversion plan to keep your home, many would take that option.
So How Can Equity Release Assist?
Well depending on the percentage split to each party, whether it is 50/50 or similar proportion, equity release could contribute either partial or in full towards the settlement.
However this would be dependent on age.
The size of the equity release is calculated based on the age of the youngest party & in some circumstances the health of the remaining party.
For example at age 60 the maximum release could only be provided by a roll-up lifetime mortgage & the percentage currently is only 26%.
Nevertheless at age 65 a lifetime mortgage can release 31%, however a reversion scheme can also now be considered.
As age increases, so do the percentages, to the extent that at age 80 one can release a maximum of 46% on a lifetime mortgage & 56% on a reversion scheme.
In circumstances of ill health, some lenders will even increase the home reversions 56% giving a more favourable lump sum based on an impaired life facility.
Therefore, via a combination of negotiation of existing assets & the application of equity release could result in the remaining party not having to move or downsize at a distressing time.
This enables stability throughout the remainder of their retirement..or until a new partner is found!
For further information
e: alison@equityreleasesupermarket.co.uk
t: 0800 783 9652
Tags: divorce in retirement, equity release, equity release schemes, home reversion, pension sharing, pensioner divorce, Roll up lifetime mortgage
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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 783 9652 or email mark@equityreleasesupermarket.co.uk
Tags: Add new tag, cashback, equity release, equity release schemes, Just Retirement, lifetime mortgages, Roll up lifetime mortgage, set up costs
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