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What Are the Key Equity Release Calculator Messages to Learn From?

An equity release calculator provides a few answers to consumers looking to take out an equity release product. To learn the key equity release calculator messages you have to understand how the calculator works in the first place. You also need to understand what equity release is and who it is for.

Release of Equity
An equity release allows you to tap into money that is currently tied up in property. You spent money to buy the house, most likely with a mortgage such as a 25 year fixed loan. You reached a point when this was paid off, so now you have the entire value of that home as potential equity to release.

For example, if the home is valued at £200,000 and you do not have a loan on the property already, then you have the aforementioned amount as the equity you can release from the property. Someone who is under 55 may or may not have a mortgage paid off in full, in which case the equity to be released would be the current market value minus the mortgage amount.

A person aged over 55 is heading into retirement and will want to have the home paid off, which may be one reason to downsize or take retirement funds to pay it off. If this is the case, then later on an equity release like a lifetime mortgage might be necessary to live a more comfortable retirement.

Basically, if you want to release equity, you need to calculate the potential amount you can actually get.

Key Release of Equity Calculations
Going on the premise of equity release for over 55s, thus lifetime mortgages, the amount you can release is called the loan to value percentage. This value is based on two factors: age and current property value.

Age is necessary because it determines life expectancy. The premise behind equity release at this age is for the loan to be repaid upon your death where any capital sum plus compounded interest has to be paid back. As you do not repay it while you are alive unless you decide to sell the home, only a percentage of the home can be given. This allows for the compounding interest to add up without the loan turning into a negative equity situation.

The value given in the key equity release calculator is going to increase as age increases. A person 65 years of age can obtain 30% of their property value in a lifetime mortgage for a maximum lump sum. A person 90 years old can obtain 52% loan to value percentage as a maximum amount. These two figures are based on Aviva products, so other companies may offer more or less than this.

Key Factors to Continue
The message here is that you obtain a value of tax free cash you could potentially release from your home. The amount quoted is a guide to help you determine if it is enough, making it worth talking to an independent broker.

As it is an estimate based on the property value you assume your home has, you have to double check the calculator’s total with a broker. They can also look at other products to see if there is something better offering a higher amount or a lower interest rate for you.

Most homeowners do not know the exact value of their property. This is due to an old estimate from when they took out a loan in the first place or bought the home. With values changing, unless you have an estate agent or surveyor come out to look at the property, you are going off projected comparable sales you found on Zoopla.co.uk or other similar websites.

Overall you have an estimate to work from. You already know you will receive tax free cash, so all that is left is to determine from calculations if one product like enhanced, standard, or home reversion is the best option for you based on the estimated percentage you can receive in an equity release.

Taking the Message
Taking the message and using it is the best way to obtain an equity release you feel comfortable with. You never have to take the maximum sum the calculator gives you. This is another key equity release calculator message to take with you. You should only take what you need and not the largest amount as a means of keeping the compounding interest down. This will save equity for your beneficiaries at the end of your life rather than taking all their inheritance as the full amount could do.

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The Importance of Equity Release FAQs

Equity release is definitely a life changing decision. By choosing to release equity that is tied up in your home, you will be affecting your life and the lives of your children. This is why it is very important for you to have all of your facts available before making the decision to proceed with an equity release application. Plenty of websites offer equity release FAQs, which you should read.

Unanswered Questions
Any unanswered question that you may have regarding equity release must be answered which is why it is such an advantage that almost every equity release website has an Equity Release FAQs section.

Here you can find the answers to the most common questions that you may have regarding equity release. The fact is that you will have questions which you will need to have answered before you even decide to employ the services of an independent financial adviser. These are the basic questions which will help you to decide whether or not you should proceed with a release of equity.

On the equity release frequently asked questions section on an equity release website, you will find answers to questions such as: –

• Whether or not you are old enough to be eligible for equity release
• Whether or not there is a minimum amount that you can borrow
• What will happen if you or your partner dies
• What will happen if your current circumstances change
• Whether or not there is any authoritative body governing equity release and protecting your rights

These are all very important questions that you will want to have answered before going to an independent equity adviser. Remember, you may have to pay the adviser for his services so why pay him for information that is already readily accessible to you?

What to do if Questions are Not Answered
There may be times the equity release FAQs section is missing information that you require. This can make things more difficult as you would have to go through more websites and hope you can find the answer. Of course we already mentioned another way for you to get answers that you might not see on the website. An independent financial adviser may provide a website and the answers you need. On the other hand you might be able to just speak with the person regarding your equity release questions and get the answers. Many advisers even in the independent market are willing to answer questions you have. They do so in the hope that you will retain their services.

When Questions Contradict Each Other
What happens when you see websites with contradictory answers to equity release FAQ’s? Chances are you are wondering who to believe. This is where the article you read now can come in. You are wary of the answers you see, so you want to find websites you can definitely trust. First always check to see when the company providing the information began. This is an indication of their actual expertise. If you cannot find it make a call and simply ask. If you cannot get a hold of anyone then move on because the company is definitely not one to trust. You should always be able to get an answer even if it means they respond within 24 to 48 hours.

Additionally, go to websites you have heard of before that offer financial products and comparisons. There are plenty of these out there. For example money supermarket, equity release supermarket, and newspaper websites will talk about the different financial products. These authority sites and .gov sites can certainly be used to gain more answers to questions. They also help eliminate the contradictions you are currently worried about.

Tips for Answers
If you follow the above tips then you can certainly determine what financial products are right for you. Allow yourself to gain the answers you need.

So if you are wondering whether or not equity release is the solution to your need of having an additional source of income during your old age, find a way to get online and start visiting the equity release frequently asked questions on as many websites as possible. By the time you are finished, you will have more than sufficient information to help you to make an informed decision. There will definitely be some standard questions that you will find on all websites but there will also be questions that may be specific to certain websites. This is why you need to visit several websites to obtain sufficient information from the equity release FAQs.

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Are Equity Release Schemes A Retirement Solution For The Elderly?

Retirement is undoubtedly a major turning point in our lives. Besides reminding you about getting older, it does put certain financial restrictions on you. Reduced monthly income is one of the major problems faced by many retired individuals and senior citizens. In such a case, it can become difficult to manage monthly expenses and property maintenance issues.

So how can equity release schemes help?
Equity release schemes are specially designed for senior citizens, particularly those aged 55 and over. By considering whether equity release schemes can be of assistance, retired individuals can get access to a lump sum or regular monthly income or even a combination of both from their property.

Moreover, an equity release scheme also allows you to continue residing in your home with no further monthly payments required. This is an important difference from any residential mortgage, as you cannot default on the monthly payments and thus risk having your house repossessed. It therefore alleviates any concerns of affecting your credit history and finding the cash to pay the mortgage which was probably the biggest financial and possibly stressful commitment during your working life!

The most popular type of equity release schemes are lifetime mortgages. Here, ownership of your property remains solely in your name at the land registry, with no transfer of ownership. This provides you with the peace of mind of knowing that any alterations and improvements can be made with minimal fuss and confidence.

Equity release schemes can therefore be a great option for retired homeowners to release tax free cash from their property. Equity release plans are basically classed as a release of capital from your property; hence, there is no tax to pay on the initial release from the provider. Consequently, your money can go further and can be used for paying off the mortgage, buying a new car, going on holiday, debt consolidation or for any other purpose. Equity release companies do not place any restrictions on how the funds are utilised.

To suit individual needs, different equity release schemes are available. These include home reversion, lifetime mortgages and pensioner interest only mortgages. Prior to opting for equity release, ensure that you do thorough research on the terms and conditions of the different loans open to you.

Taking independent professional advice would be a wise decision. Based on your preferences and needs, professionals can advise you about the best equity release option and save many £1000’s over the long term and ultimately benefitting your children and beneficiaries.

Disadvantages of Equity Release Options
Each product available to you will have different advantages and disadvantages. In saying that, there are certain main negatives to discuss. Since the equity release is based on current home value and that can change towards a negative value there is worry of lowering or removing all the inheritance options you wish to leave.

If a negative equity situation occurs on your home with a mortgage release, there is a clause to protect your beneficiaries from having to make up the difference. If you do not see this clause make certain that you ask for it to be put in there. This is the only way to protect your family from having to pay more after the house is sold.

You can also choose from two options that would make it easier to leave an inheritance. As senior citizens age there is not always a reason to keep the home in the family. If leaving cash is more important than keeping the home, you can go with home reversion.

Home reversion allows you to sell your home all or in part. By selling your home you gain access to the cash you need and any unused portion of home equity goes to your family after your death.

The other is the more desirable interest only mortgage. You retain ownership of your home as stated above and you also leave only the principle balance of the mortgage behind. Since you pay the interest you allow for the sale of the house, where the principle balance is paid. Any money that does not pay for the lump sum goes to your family.

Speak with your family and make them understand what senior citizens must go through with regard to retirement funds. This is the only way to ensure you and your children understand the need for such a project as equity release. It may not always work out for you and that is okay because your family could come up with a better choice. Just make sure to speak with a qualified advisor first.

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A Sneaky Peek into the Halifax Equity Release Retirement Plans

Equity release has certainly become popular among senior citizens in the UK. Equity release schemes are now a lot easier to understand and are more accessible, which has given older people a reason to cheer. Taking out a mortgage has always been complex for retirees. The long process and complicated regulations made it almost impossible for older people to apply for a mortgage without taking proper professional help. Older retirement plans did not always work, so equity release is becoming more preferred by older people who own a property. Mortgage lenders seem to be reluctant to grant mortgages to retirees beyond the age of 75 upon equity release examinations of current products.

Halifax equity release offers an easy and practical equity release service to its customers. It is often near-impossible for a retiree to get a loan sanctioned because of their age and unlikely ability to pay loans back. Halifax has broken this misconception by providing attractive equity release schemes to its customers.

There is a niche market for certain professionals to exhibit their skills and therefore the Halifax branch networks you will find are unable to offer advice. This fortunately is left to certain qualified intermediaries who have the appropriate Halifax equity release examinations, license to provide advice and guidance on this product. Therefore, safety and quality of advice should prevail.

The retirement home plan for seniors which is provided by Halifax is the first chapter of the story.

About the Halifax Retirement Home Plan
The Halifax retirement home plan is an interest only lifetime mortgage plan in which the outstanding balance remains unchanged until the end of the deal. The borrower has to pay a partial sum of interest to the lender every month. Previously, seniors with equity release schemes did not make any interest payments and so the loan amount kept increasing month after month. In short, by the time a borrower dies, he or she has a big debt over their head and even more concerning would be the inheritance left to the beneficiaries.

Halifax retirement plans enable the borrower to pay whatever interest is charged from variable resources. The source of income can be a private or occupational pension, or state grants such as government pension, or means tested benefits such as pension credit. They also accept other forms of income such as DLA (disability living allowance), Industrial injuries benefit and carer’s allowance. Finally, rental income is acceptable at the discretion of the underwriters providing a short hold tenancy agreement is in place and the amount used for equity release calculation purposes is at least 60%.

Halifax is among the best equity release providers and that is the reason why they are trusted and becoming used more than many other equity release service providers.

Other Choices on the Market
During the equity release examinations it was determined that more than one provider offers an interest-only lifetime mortgage such as Stonehaven. It is important that you consider all of your options not only with interest only loans, but with other equity release schemes. Stonehaven has more than one plan to ensure your retirement is as pleasant as possible.

The main thing to remember no matter which company you choose is that you need a plan that fits your income and ability to repay. It also needs to fit your beneficiaries if you intend on leaving something behind.

An interest-only lifetime mortgage plan from Halifax at least offers the option of leaving behind a little inheritance. This is due to the principle balance remaining after the scheme is over. It is dependent on whether you live past the age the scheme will end. Typically, this type of option is complete at 75 leaving you no choice but to sell the home to pay off the principle balance.

In this situation or with a sale after your death, you at least have money from the sale. Whatever is not going to the mortgage provider to pay off the principle loan amount is going to be yours or your beneficiaries.

When you conduct equity release examinations, speak with your family and a financial adviser. You want to speak with an independent adviser and not one offering a home retirement plan. In this way you can check the facts and validity of what you learn when you contact the supermarket about Halifax Retirement Home Plan choices and other products. Contact us on 0800 5159 678 about the Halifax Retirement Home Plan today & see whether it can help with your retirement plans.

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All You Need to Know About Interest Only Mortgage Deals

Owning a home is a dream come true; paying a capital and repayment mortgage in retirement however can be a nightmare for most pensioners. Certain organisations offer mortgage plans where you only pay interest, which makes it easier for you as a home owner to make the monthly payments. Pensioner mortgages are therefore becoming increasingly popular and the interest only lifetime mortgage route seems to be the key. Applying for one of these products is often based on your life expectancy, age, and current home.

Features of the interest only mortgage
Money lenders assign a period of years for an interest only mortgage plan. You as a borrower are required to make monthly payments on the interest over the estimated term of your loan. The term is estimated as the plan will continue for the remainder of one’s life and as yet no one can accurately judge what life expectancy is for anyone!

This basically means that you do not have to pay any money off the principle amount; nevertheless you are repaying the interest generated by the charge levied on the capital each month. This ensures the capital element will always remain constant, providing payments are maintained.

Until recent regulations changed on mortgage lenders providing their customers with an interest only mortgage, some people may be trapped between the old and new regimes. The issues arising here are what can one do when one needs to take additional funds via a further advance or moving house?

What of the past?
Many people have previously been granted an interest only mortgage running well into retirement with no repayment vehicle in place. However, from experience those same mortgagors now needing amendments to this plan find they have to adapt to the new regime of the mortgage lender. This creates a major problem.

Under the new regulations, the client usually has to have the pay off on the new mortgage by the time they are 75. Unless the provider offers an interest only lifetime mortgage then it must also be on a capital and repayment basis. Difficulties therefore will arise when someone age 65 then has to pay off a £50,000 mortgage by the time they are 75! Affordability will be the issue as monthly payments of paying off £50,000 over 10 years will be outside the realms of most pensioners.

Next we discuss the interest only mortgage options available to pensioners with mortgages that now need to meet their future retirement objectives.

If you are in a situation where you need to pay off the interest-only lifetime mortgage by 75, you may need to seek a different equity release plan. The key is in home reversion.

Home Reversion to Pay off Interest Only Lifetime Mortgages
Home reversion can be obtained when you are 65 years or older. It cannot be obtained if you have an outstanding mortgage, unless the amount being sold covers that mortgage for the payoff. If you have a low interest only lifetime mortgage principle balance, then there is a possibility of selling a portion of your home to pay for it and gain retirement funds. It is not an ideal choice.

Other Choices with New Policies
Since most interest-only products under lifetime mortgages are only good for 10 years, you may want to re-evaluate your life expectancy and workable retirement age. In fact in the United Kingdom many homeowners are waiting to retire until they are closer to 70 in order to keep money coming in.

With part-time jobs and their pensions they can live on their income during their early years. When working becomes too difficult then it is time for the interest-only lifetime mortgage on the thought that one’s life expectancy will be smaller even within the 10 year mark of paying off the interest-only lifetime mortgage.

It is never pleasing to consider that a new loan will have to replace an old loan; however, that may be your only option when you take out an interest only lifetime mortgage that requires repayment within 10 years. The key to such a regime is ensuring your housing value will support the new loan as well as cover your pensioner needs for quality life in your later years.

Speak with a financial expert to determine which products will better suit you among the available interest-only lifetime mortgages. Also use a calculator to assess the affordability of such an option based on your life expectancy. It is not something you can pinpoint with certainty, but often family history shows life tendencies.

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How do I find the Best Equity Release Schemes?

As you enter into your retirement years often it can seem frustrating that you are unable to tap into the equity within your own home. In many ways you can end up being “asset rich, cash poor”. The retirement years should be an enjoyable time of life and not one in which scrimping and saving is a daily necessity. If you own your own home then there is a way to tap into the equity within your home and release some of it at a time when you either need to or would like to, in order to enrich your twilight years. Simply search for equity release companies providing schemes that appeal to you.

Equity release schemes offer financial help and there are many equity release companies across the UK who can now assist the over 55’s in being able to enhance their retirement provision. Diversity and research are key to finding the best equity release plan amongst the plethora of schemes, rates, deals and options available.

In order to find the right equity release scheme for your individual needs, it is recommended that you follow a number of key steps:

• The first thing to do is shop around. You can either do this yourself or use one of the comparison websites available. If you are less internet-savvy then it is always a good idea to approach reputable financial institutions and enquire about what they offer. A number of reputable financial institutions offer equity release schemes.

• Another way of finding the best equity release companies and the schemes they offer is to contact the Equity Release Council (formerly SHIP) who has a ‘find an adviser’ section whereby they can locate a local equity release adviser. All of their providers must adhere to a strict set of rules which offer the customer a great deal of protection. Always remember that this is your home and therefore any contracts entered into must be done so with the utmost caution. You would not let a stranger walk into your home without first asking who he was and what he wanted.

• Also weigh up other options that are available as a means of releasing equity. Perhaps you could downsize on your property and release equity in this way, therefore still owning your own home outright. Often this has other benefits such as a reduction in household bills or being able to consolidate debts such as credit cards and personal loans.

Types of Equity Release to Research
Researching companies and products is easiest once you understand what is out there. You have two options of equity release schemes: home reversion and lifetime mortgage. Home reversion is a sale of your property in part or full. You remain in the home rent free with a tax free lump sum under a lifetime tenancy agreement. You do not have to move or sell the entire home until you are ready to move into a care facility or until your death.

Lifetime mortgage is an actual loan with compounding interest. It is a loan that must be repaid on your death or when you move to a long term care location. You can transfer the mortgage to a new property; however, if you pay off the equity release early there are penalties associated with it.

Under lifetime mortgages you have a breakdown of four types providing you with a choice in how you protect your home and your children’s inheritance. The most beneficial scheme is the interest only lifetime mortgage. It is also the most difficult because you must pay back the interest you accrue on a monthly basis. It leaves the principle balance to be paid at the end of your life or move to a care location. Since home value can change and you take out a lump sum, the principle balance remains unchanged; therefore, it may be easier to pay off with a sale of the home or by other funds your family has.

Drawdown mortgage choices are the second best option since you pay interest only on the money you withdraw from the account and not the entire amount available to you. This way you can withdraw money as you need it, but avoid taking too much out.

If you decide that equity release is right for you then make sure that you seek professional independent advice before committing to any contracts. Equity release companies are in the business to make money, so remembering this is not just a decision that affects you but also your children and beneficiary is imperative.

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Health Factors That May Influence Your Application for Equity Release

The economy has been tough lately, and more and more people are increasingly opting for alternative finance such as equity release to enhance their retirement finances. This should help them maintain the lifestyle that they are used to. Annuities are not the only financial product whereby your health can influence the value of the investment you can make. With enhanced lifetime mortgage schemes, lenders can now request your medical records to ascertain the severity of your medical condition and therefore the maximum equity release lump sum you can obtain.

Conditions such as heart attack, blood pressure, cancer, angina, stroke and even if you are on mediation can all affect the size of the equity release. For those who are unsure whether they qualify should contact their independent equity release adviser who can refer your case to the three enhanced lifetime mortgage companies. These are currently Aviva, more2life and Partnership and surely this list will continue to grow as more equity release lenders become aware of the market potential.

What many retirees as well as those who are approaching the end of their working life are doing is the release of equity from their homes, which ideally allows the value in their property to work for them. You will find various equity release schemes available in the market and it is important that you understand how each one of them works, which must include the equity release pros and cons of each. You also need to know if you actually qualify and how much you qualify for depending on your medical condition and other circumstances.

The first criteria is age. You must be at least 55 years old or if you are applying as a couple, then both of you must be over 55 years old. Additionally, you must be a resident of the UK or Northern Ireland and your property must be worth at least £60,000. You also need to understand your property type, since most providers will not offer equity release on high rise flats, freehold flats and mobile homes. Other factors come into play depending upon the type of scheme. The minimum age for most plans is 55 however, if you want to take a home reversion plan, you must be aged 65.

As mentioned earlier, the way you live your life and overall health are a major contributing factor that comes into play. The best way to know if you qualify and how much you qualify for, is to speak to a specialist, and have a detailed financial planning report of what you want to achieve. The expert will highlight the advantages & disadvantages and your overall health to determine the best option. If you are looking to improve the quality of your standard of living in retirement, an equity release plan would be a great idea.