Equity Release Products | Equity Release Plans

Nov

Do You Qualify?

Categories: Equity Release

If you are interested in an equity release scheme, you of course want to know if you qualify. You may also want to know if you qualify for an impaired equity release, which may have the benefit of a larger lump sum payment or lower interest rate.

In general, if you are older than 55 and own your own property in the UK, you may be eligible to take advantage of an equity release scheme. Of course, confirming eligibility is a bit more complicated than that.

Criteria for qualifying is usually divided into a few different categories, all used by lenders to determine if you are a good candidate for an equity release product. The qualifying criteria includes the home’s location, the property value and condition, the age of the homeowners, the amount of the loan, and overall credit history.

Location

In order to qualify, your home must be located somewhere in the UK. There are some further restrictions that must be followed by certain lenders, as well. For instance, if you live in Northern Ireland, you would have just two options when it comes to lenders.

Property Value and Condition

Your property must have a minimum valuation of £70,000 in order to qualify for any equity release plans. For the most part, there aren’t any maximum limits imposed but that can depend on the lender.

The condition of your home will also be taken into account. It must be in good condition overall and it must be well maintained. A home that is in poor condition or that has not been well cared for can get declined by many lenders.

Homeowners’ Age

You have to be at least 55 years old to take out an equity release plan. That is the minimum, but many lenders require a higher age, usually 60. It is the age of the youngest homeowner that is taken into account when determining eligibility.

Loan Amount

You must take at least £10,000 with any plan, but some lenders require a higher loan amount. The maximum that you are allowed to borrow will depend on a few different factors including the value of the property, your age, and your overall health. In general, the older the homeowner, the more than can be borrowed.

Credit History

There are no repayments required with equity release products. So, the criterion is a bit more laid back than you would find with products that do require repayments. Many lenders do not do a credit check at all, but that differs by lender.

Impaired Equity Release

There are further requirements you need to meet to qualify for an impaired equity release product. You must have a qualifying health or lifestyle condition. Qualifying conditions are those that typically cause a shortened life expectancy, such as smoking, high blood pressure, diabetes, or Parkinson’s Disease. You may also qualify based on your body mass index, the fact that you take prescription drugs, or if you had to retire early due to poor health.

With an impaired equity release plan, you may be able to receive a larger cash payment or benefit from a lower interest rate.

Nov

Why the Aviva Equity Release Calculator doesn’t Show Whole of Market Results

Categories: Equity Release

Tags: Application Fee, Aviva, Aviva Equity Release, Aviva Equity Release Calculator, Aviva Lump Sum, Aviva Lump Sum Max, Aviva Lump Sum Max Plan, Aviva Products, Brokerage Firm, Equity Release, Equity Release Advice, Equity Release Calculator, Equity Release Company, Equity Release Lifetime Mortgage, Equity Release Lifetime Mortgage Products, Equity Release Products, Equity Release Supermarket, Free Valuation, Independent Brokers, Independent Equity Release Advice, Interest Only, Interest Payment, Interest Rate, Just Retirement, Lifetime Mortgage Products, Lifetime Mortgages, Loan To Value, Long Term Care, Max Lump Sum Plan, Negative Equity, Pure Retirement, Retirement Pension

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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.

The primary definition of equity release can be explained as any loan that is taken against your home as security. While this is increasingly becoming a popular practice, it is always advisable to exercise caution while using this form of home equity loan as it may leave your beneficiaries with no inheritance if advised incorrectly. For example weigh your options for how to use your equity release for retirement such as being careful about how to use equity release for a holiday versus another purpose.

Ways to Use the Loan
Home equity loans are usually provided as an option to homeowners who want to use their property as collateral to get a lump sum of money against the value of their home. Since a home equity release lets the person have a set amount of money, most people who use this option generally use the money to pay off debts such as a mortgage, unsecured loans or overspending on credit cards.

Using equity release for debt consolidation can be considered to be a wise option as usually the interest rate on the equity release schemes are lower than the ridiculous interest penalties applied by the credit card companies, usually in excess of 20%. While many people use the equity release to pay off their debts, there are some who use equity release for a holiday too. Such people are looking for a lifestyle enhancement here. The opinion of these people is that when they have worked all their lives, they deserve a nice holiday with their loved ones to relax and recharge the batteries. These people take a release of equity in order to improve their lifestyle.

This has been the biggest growth area in the equity release marketplace as it is not a need fuelled by necessity, but one of aspiration. That one off luxury purchase is also something that most people look at using the equity release. This could be buying their dream car or going on an once-in-a-lifetime cruise which is becoming increasingly popular these days.

Another common use of equity release that is evident in today’s economic climate is to help the children. Parents usually opted for a home equity release to help their grandchildren with education or launch their career. Times have changed and rather than skipping a generation, the need has been driven back towards their children in helping them get onto the property ladder or keeping their business afloat.

Specifics of Equity Release Products
You know how you can use these products, but what is the process for attaining such a loan? How old do you need to be? Are there any disadvantages to these financial products?

These are questions that need answered if you want to obtain a product that works best for you. The first answer is that you need to find a mortgage company that deals in lifetime mortgages or equity releases for retirees. You can then look over their specific qualifications. One of these is being at least 55 years of age, where some companies may require you to be 65. As long as you are of age, you own your home or can use the lifetime mortgage to pay off the loan, and have good credit you can apply for this financial product.

Disadvantages to Lifetime Mortgages
The third question asked above needs its own heading. These are important notes to remember. First, if you use equity in your home by obtaining a loan you must repay the loan. The good news is the money is tax free and you do not owe a monthly payment. The interest can be paid in a monthly payment with an interest only lifetime mortgage, but otherwise the interest and principle balance is repaid upon death. It can also be repaid if you decide to sell the home and move to a new one or into a retirement community.

Depending on the amount you borrow you may reduce the size of inheritance or take it away completely.
A home equity release plan may seem to be an easy option but this money should be spent wisely. These forms of equity release mortgages which are arranged are usually advisable for retirees seeking for an easier and more comfortable retirement. There are several schemes that make equity release beneficial for people over the age of 55. This is the reason why pensioners are believed to be the biggest group of people who reap the benefits of home equity release plans even to use equity release for a holiday.

Are you ready for all the good things that equity release has in store for you? It’s no surprise that many people over the age of 55 are focusing on the advantages of equity release. By definition, equity release is simply converting all or some of the equity in your home into cold, hard cash. Plenty of companies offer you an option for gaining cash like Stonehaven.

Stonehaven is a company that offers equity release possibilities for people who are over the age of 55. Only over 55’s can tap into what equity release schemes have to offer. So consider yourself lucky if you fall into this age bracket today. Stonehaven is pioneering because for the last 6 years it has been offering people over the age of 55 the chance to release equity with their award winning equity release company with a wide range of different schemes.

Sample a little bit of what these plans have to offer you by looking below:

Interest only lifetime mortgage: Stonehaven offers interest only lifetime mortgages. These are mortgages that allow you to get a cash lump sum where you are only paying the interest back and not racking up any extra debt on your account. Hence, it is unlike a roll-up lifetime mortgage (see below). Consider an interest only lifetime mortgage if you want the amount you are paying every month to stay the same instead of going up and down depending on what is going on in current affairs.

Fixed Interest Rate for life: Stonehaven’s plans offer a rate which is fixed for the rest of your life, leaving you safe in the knowledge of exactly knowing your monthly repayments. This allows one to budget accordingly & plan how to spend the household surplus.

Roll-up equity release: This is the plan that has the quirky name. A roll-up equity release plan is essentially a way for the interest you have on your mortgage to be rolled up in your equity release and you pay it within the loan. The money that you get from the roll-up equity release is basically tax-free so you can use it any way that you want. What happens with roll-up equity release is it stays as a debt so when you die, your family will not be burdened with a massive cut from HM Revenue when it comes to inheritance tax.

As mentioned, Stonehaven is not the only company offering lifetime equity release mortgages. You may find that another option is more affordable or better suited to your needs. Before deciding on one company always do your research. This is one of the top tips we can offer along with a few others.

Products with Advantages and Disadvantages
Whether you decide to choose an equity release from Stonehaven or another company there are going to be advantages and disadvantages of equity release schemes. You will want to decide if you are able to live with these or if you feel it is just too much for a little money.

Living without money especially enough to cover your bills in retirement is often too hard. You worked your whole life for a chance to relax. Taking advantage of products on the market that can offer you help is a good thing as long as you can live with the end result. Sometimes in life your younger family members need to live just as hard, so they can enjoy retirement rather than getting a helping hand from inheritance. If it is a matter of living with enough money to enjoy life in the end, then the potential removal of cash for use may be your best option.

As you search around for the best solution to fit your needs remember that drawdown, enhanced and home reversion are three other types of equity release products available to you on the market. They may fit your needs better than those at Stonehaven or not. Discuss all of this with a financial adviser to truly understand the full weight of your options and repayment needs.

Top tip: Read up on all of the thresholds for inheritance tax so you know how roll up equity release plans from Stonehaven affect you and your family in case you die. If you give out cash that is tax free now in small lump sums to your family it is not subject to inheritance tax. This could be a better benefit in the end. Also look at the benefits of interest only lifetime mortgages.

All posts tagged Equity Release Products

Do You Qualify?

Why the Aviva Equity Release Calculator doesn’t Show Whole of Market Results

Equity Release Can be Used to Finance Your Holiday too!

How Equity Release Schemes Help Over 55s