All posts tagged Equity Release Schemes

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.

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.

With the people around the world still feeling the impact of the global crisis in the financial industry, many are trying to establish a financial solution to their current recession problems. These problems are not limited to the working age population as many older people have seen the real world value of their pension compromised by quantitative easing and inflation. Even those who have made adequate pension provisions may find that their pension falls short of meeting their needs. This is the main reason why equity release schemes have experienced a resurgence in popularity over the last few years.

What are Equity Release Schemes?

Equity release schemes are specially designed financial products for the over fifty-fives age group. They allow home owners aged between fifty-five and ninety-five to release the equity tied up in their home without the inconvenience and upset of moving home. The funds released are provided tax free and can be used for any purpose. Many people use equity release to supplement their pension income, make large purchases such as a holiday home or assist their children or grandchildren financially.

The global recession has made it very difficult for younger people to take their first steps on the property ladder, but with equity release, older relatives can leverage the equity in their home to finance a deposit for a first time buyer without placing their home at risk. This can be done because equity release schemes are intended as a lifetime mortgage or loan. The amount borrowed does not require monthly repayments as the interest is accrued and then compounded on the balance each year. The total loan balance is only due to be repaid when the home owner passes away or moves into a long term care facility. At this stage the property is sold, the balance of the loan settled and any remaining money from the sale is distributed to the beneficiaries of the estate.

How Much Can be Borrowed with Equity Release Schemes?

The amount of money which can be borrowed with equity release schemes depends on a number of factors. These include the age and gender of the applicant, the value of the property and the balance of any outstanding finance secured on the home. In some cases the health of the applicant is also considered. This is to assess how much equity is available in the home and if it meets the loan to value ratio specified by the lender. Additionally, the personal information is used to estimate the approximate lifespan of the applicant which would determine the duration of the loan.

Generally, applicants who are older will be able to release a greater percentage of equity compared to someone younger. However, women have a statistical likelihood of living longer than men, so their gender can affect the amount which can be borrowed. Additionally, some providers offer impaired life equity release schemes which consider those with an impaired life expectancy, for example someone with a terminal condition or long term illness. These cases will generally be offered a greater percentage of equity release based on the estimation that the lifetime mortgage will run for a shorter period of time.

The general rule of thumb for an equity release scheme is that you should be able to release thirty to fifty per cent of the value of your home. However, this is dependent on your circumstances and the type of property. There are a number of equity release calculators which are readily available online. These offer free and confidential examples of the amount of release which would be available in your specific circumstances. Many of these calculators will even allow you to compare the details of specific equity release schemes to determine which represents the best possible deal for your requirements and circumstances.

In order to obtain a full view of the equity release schemes which would be applicable for your circumstances, it is recommended that you utilise a number of different equity release calculators. This will provide a wider range of products to be assessed to increase your chances of finding the best possible deal. This will enable you to assess the maximum amount of release possible, compare interest rates and examine the financial implications of choosing a specific product.

If you are interested in exploring equity release schemes and are unsure if they would meet your requirements, an equity release calculator can provide a great starting point. However, before making any final decisions about the feasibility of specific equity release schemes, you should consult professional specialist advice. This will ensure that you are confident in your decision and assured of the best possible deal.

For those people struggling to manage on their pensionable income or looking for finance for a larger purchase, there can be few options for conventional finance when you reach a certain age, especially when on a restricted income. Equity release schemes have been especially designed for the over fifty-fives age group. They allow home owners to release the equity tied up in their home, without needing to move home or make monthly payments compromising their monthly disposable income. There are a number of equity release calculator tools available, these can allow you to explore equity release, compare deals tables and confirm whether you meet the eligibility criteria. However, in this age of cyber crime, many people worry about whether using an equity release calculator is dangerous.

What Are Equity Release Calculator Tools?

An equity release calculator is an online tool which is provided free of charge on the websites of equity release companies and brokers. They allow people to learn more about equity release, compare deals tables and establish whether they would qualify for an equity release scheme.

These calculator tools have been pre-programmed with qualification criteria such as:

• You need to be aged between fifty-five and ninety five
• You must be a UK home owner
• Your property value must be a minimum of £50,000.

By answering the questions posed by the equity release calculator, home owners can determine if they meet the specific criteria, learn what the maximum lump sum offered would be and receive details of the schemes and plans which are appropriate to their circumstances.

Why Would an Equity Release Calculator be Dangerous?

In order to ascertain your qualification for equity release, you will be asked questions about your personal circumstances and your property. However, there is little concern about them being dangerous. Most calculators offer complete confidentiality. In fact, many calculators will allow you to use them anonymously without providing any identifying information. Although you may be asked for your age, gender and postcode, this is not sufficient information for any type of fraud. However, you should be wary of any calculator which will not function without you providing your personal contact information.

In most cases, the calculator may prompt you with a question of whether you would like an adviser or broker to contact you, but this is an optional service. Most lenders and brokers appreciate that home owners wish to shop around with no commitment or sales pressure. This means that they allow their calculators to be used for free and will actively encourage home owners to use multiple calculators to gain a good insight into the products available on the market.

Can the Figures from an Equity Release Calculator be Relied Upon?

Many people are also wary of basing their future plans on the figures provided by an equity release calculator. Many of these calculators are extremely accurate, but there are some limitations. These include:

They work on mathematics only: The calculators are programmed to work out a mathematical formula only. This means that they are only accurate if you have provided accurate information. They have no facility to check the market values which are current in your area, the balance of your outstanding finance or other details. This puts the responsibility on the home owner to ensure that the information they enter into the calculator is accurate.
They are restricted to a particular product range: Calculators are only programmed to the criteria of the specific product range. Calculators on specific company websites will be tied to their particular range of products. It can provide a wider range of product information if you use a calculator from an independent broker. It is also recommended that you use more than one calculator to assess the marketplace more fully.
Check comparison tools: It is also a good idea to check websites which offer equity release compare deals tables. These provide simple tables which allow you to compare different rates and packages. This can be a simple way to check the financial implications of equity release without giving any personal details.

If you are interested in equity release, compare deals tables and equity release calculator tools can be extremely beneficial for your research. This can enable you to move forward with a more rounded knowledge about equity release and the types of deals which are available for your circumstances. This can enable you in making informed decisions and choices about whether you would like to move forward or explore alternative avenues.

Many people dream of the prospect of their retirement. However, in the current economic climate with quantitative easing measures which have compromised the real world value or pensions, a great number of people are worrying about the prospects for their retirement. Once you reach retirement age, the avenues to conventional finance can sometimes be closed to you. However, equity release schemes have been specifically designed for the over fifty-fives age group. This can enable you to release funds tied up in your property. Equity release calculator programmes are readily available to check whether you would qualify and how much you could expect to receive.

How Equity is Defined
Equity could be described as your stake in your property. Equity release calculator tools essentially calculate your equity by taking the balance of any outstanding mortgage from the value of your home. When you first purchased your property, you may have borrowed ninety per cent of the property price from the bank as a conventional mortgage. This would mean that you would have had ten per cent equity. As time passes and you pay off more of your mortgage, together with property prices increasing, you would find that you have more and more equity tied up in your home. For many retired people, they have little to no mortgage on their home, but may be struggling for actual cash.

For the purposes of equity release, many people can expect to release between thirty and fifty per cent of their equity as a lump sum or additional income. The reason for this is that the equity release loan requires no monthly payments. The interest on the loan is accrued and added to the balance of the loan in the form of compound interest. You are guaranteed the right to residency in your home for the rest of your life and the balance of the loan is only repaid once you have passed away, or if you move into a care home for the long term.

The Benefits of Equity Release
When considering equity release from your property, equity release calculator tools can highlight a number of benefits from specific equity release packages. However, there are numerous benefits to equity release which apply to the majority of schemes. These include:

  • Obtain a lump sum or an additional income stream: When choosing equity release, you will have the option of obtaining a tax free lump sum or an additional income. The equity release product allows you to borrow money against the value of your property to finance this sum. This can be very helpful if you are planning a large purchase such as a second home, need to supplement your pension or are looking to financially assist your children or grandchildren. There is no restriction to how you spend the lump sum or income; it is yours to do with as you please.
  • Improved lifestyle: For many people equity release is an effective method of improving their lifestyle. Essentially you have leveraged the value of your property in order to live off your investment. This can mean that you have additional disposable income without compromising your existing income. This could mean that you could take a once in a lifetime dream holiday or simply spend more time with your family. This type of scheme can allow you to fully enjoy your retirement without worrying about bills and finances.
  • Effective tax planning: Not only is your equity release sum tax free but you can use the funds to plan tax effectively. Many people opt for an income or draw down facility rather than a lump sum so that they can minimise their tax risk and not compromise their eligibility for certain means tested financial assistance. However, some people utilise equity release as a method of inheritance planning. By gifting money to your beneficiaries while you are still alive, you reduce the risk that they will need to pay inheritance tax when you pass away. The current inheritance tax threshold is set at £325,000. This may seem like a high amount but it will include the value of your property. By releasing the equity from your home, you can continue to live in your home but financially assist your family and help them to avoid paying inheritance tax in the future.


If you are interested in releasing equity from your property, equity release calculator tools can provide a good starting point for your research. They can provide you with details of schemes which you would qualify for and provide an insight into the maximum lump sum you would receive. This will enable you to have the information necessary to make an informed choice about proceeding forward with an application.

As a pensioner, it is not always possible to meet your daily needs with the little pension amount that you receive on a monthly basis. With an equity release plan, you might just be able to secure your retired life; however, you will need to have ownership of a property. There are many different types of equity release schemes which will make it possible for you to release money from all or a portion of your property.

The great thing about equity release plans is that you do not have to leave your home even if you sell it to an equity release provider. Eventually, when you die or move into long term care, your property will be sold to repay the equity release provider.

In order to choose the right equity release plan or the right equity release provider, you will need to compare equity release mortgages. The internet is filled with many different useful websites such as who make it possible for you to compare and analyze the different equity release plans and providers so that you can chose the plan and provider that are best suited to meet your needs and requirements. They can be contacted on 0800 678 5169

These websites are free, interactive and can be of great assistance when conducting your own research on equity release. These websites make it possible for you to easily compare equity release plans and providers through the use of equity release calculators. Equity release calculators make it possible for you to instantly determine how much money you can borrow from a specific provider. Equity release calculators are the perfect way to compare equity release plans and providers.

When comparing equity release providers, you should make sure that you check the reliability and the credibility of each company as well as the total amount of years that it has been in business. One of the most important factors to focus on when comparing equity release providers is the interest rate that they offer. Based on its reliability, credibility, and experience, you will be able to choose an equity release provider that offers the highest returns from releasing equity from your property.