All posts tagged Equity Release Supermarket

Aviva is one equity release company providing retired or near retirement homeowners a chance to improve their cash poor situation. If you have entered retirement and find you are spending your retirement pension too fast there are only a couple of things you can do. You can adjust your lifestyle, downsize, or find a way to supplement your income. Equity release products such as the Aviva Lump Sum Max plan is a lifetime mortgage. To find out how this product can help you there are necessary tools like the Aviva equity release calculator available to you.

How Aviva Works
Aviva provides certain products for individuals over the age of 55. However, their products are announced on sites like Equity Release Supermarket and through a brokerage firm. If you go directly to their website, select the product shown, you will be sent to a brokerage firm that is not independent. They do not offer independent equity release advice. It is an agreement they have made with Aviva. It also means the product mentioned on Aviva’s website and through this tied sales team is not as competitive as Aviva products you can find on Equity Release Supermarket. You can use the safety net of a company you recognise and trust by choosing Aviva, but you do need to be aware the product may be a poorer deal for your beneficiaries on the long term.

Lifetime Mortgages
Lifetime mortgages are a loan for retired individuals because you make no payment towards the principle amount. There are only a few products which are interest only, where you do make an interest payment each month, but the product is not repaid in full until the end of your life. The Max Lump Sum plan from Aviva is a straightforward lifetime mortgage in that you make no repayments and pay no interest until the end. When you die or need long term care your loan will need to be repaid, often through the sale of your home. This is where it can become difficult for your beneficiaries. The sale of the home has to cover the capital sum plus any interest that has accrued. The more interest that accrues the less that is left over.

When you have a non-competitive product this means the interest rate is not in line with other equity release products. It could be significantly higher than competitive products found through independent brokers.

Independent Brokers
An independent broker is going to look for the best product for you. They will find the lowest interest rate for the maximum amount of value possible. You get to decide the best deal. Sometimes you may have to go for a higher interest rate to unlock the maximum amount you need.

An equity release calculator can be used to determine the maximum amount to be released such as 30% at age 65 versus 40% at 75. You can change items in the calculator to fit the competitive products on the market; however, Aviva equity release calculator does not allow for this. The Aviva tool is specific to the Aviva Lump Sum Max Plan. It will not provide results for any other plan even other Aviva products sold on independent sites. It limits your knowledge of available options. An independent calculator would not do this.

The Products on the Market
Aviva, Pure Retirement, and Just Retirement offer some of the equity release lifetime mortgage products on the market right now. At age 65 all offer 30% of the home value in a loan to value percentage based on age and home value. The percentage allows for the accrual of interest while keeping the loan low enough that it should not hit negative equity.

The older you are the more you can release which is why at age 75 you could get 41% from Aviva and 42% from Pure Retirement. Pure Retirement also offers free valuation, the larger cash back option, and no application fee if the loan is for more than £45,000.

Overall, you want to make certain you are working with an independent tool to get the best information possible. It may turn out for your needs and situation Aviva is the perfect company to go with through the brokerage firm. On the other hand you may find the Aviva equity release calculator results are not apropos for your situation and thus you need to shop around more. Using independent tools you can save time in your research.

There are a lot of pensioners who are suffering from mortgage debt and some of them are still making monthly repayments, even when their sole income is coming from their state pension. The Financial Services Authority, now the Financial Conduct Authority, has recently been highlighting the number of people who are planning to retire and still have some mortgage to pay. Some of these retired homeowners may have suffered from the failure of an investment such as an endowment, which is their way of paying for the loan. There is a solution in a remortgage equity release plan.

Answering the Question
The question for all these people left in the lurch is how they can get themselves out of the hole they may have dug for themselves. One such answer could lay in the use of equity release schemes in order to repay the mortgage debt, thus removing the future worry about struggling to meet the unaffordable mortgage payments.

Likewise, pensioners who have previously taken out an equity release mortgage from their home in the past can now take advantage of a remortgage equity release plan. Many people have experienced a remortgage of some form in the past and the reasons behind this course of action may have been many. One of the main reasons could be due to interest rates falling since the original equity release plan was taken out. By switching equity release schemes can therefore make savings of £1000’s in the long term. In 2004, the fixed rate for an equity release was around 8%; however, companies such as Equity Release Supermarket can today show rates starting from 5.57% annual.

Getting Proper Advice
To remortgage an equity release scheme is a very important decision that you have to make. In order to help in understanding more about this scheme then you can read some guides on the internet or you can hire the services of an independent equity release adviser. These guides will clearly explain how equity release really works.

Lifetime Mortgage Commitment
When you are taking on a lifetime mortgage commitments then you don’t have to make any repayments. Instead you will be charged with interest until such time that you die and the total amount which comprises the released money and the interest will simply be deducted from the value of your estate.

Please note there are different lifetime mortgages that can be used to remortgage a current loan. You have interest only products as stated above in that the interest is paid throughout your life. You also have a lump sum. This product offers you a lump sum of cash, but the interest is added to the principle sum and both are due at the end of your mortgage. For many this works out better since they will not need to have a payment each month.

Another choice is drawdown lifetime mortgage, but this only works if the remortgage need is very small. This is due to the mortgage offering a small lump sum in the beginning and then money to take as you need it. For some it could work, but be sure that you will not be in a more difficult position later.

Home Reversion versus Remortgage
In other types of equity release such as the home reversion method, part of your home will be sold to the reversion company and at the time of your death, they will at that point, claim their share. It is very important for people to consider remortgaging since their changes may have changed since the original plan was taken out. Health and family are factors that cannot ever be guaranteed and could therefore influence your future decisions and this render the original plan inappropriate or uncompetitive.

Talk with Family
You already know you need to speak with an adviser who can help you plan correctly. You should also make sure your family is part of the decision. It is your family’s inheritance that you are playing with when you take out new financial products. If you want to leave something behind they should at least be aware of what will occur with the family home. You can definitely leave inheritance depending on the product of choice. They can also be a second pair of eyes to help you read the fine print.

Before making a decision to remortgage equity release schemes, you should compute everything in order to verify whether this option is financially viable. You should also consider potential repayment charges as well as the plan set up costs when making this important decision.