Can Equity Release Be Taken with No Advice?

There is a simple answer to this question: No!

Protecting your equity
The Financial Conduct Authority (FCA) oversees the equity release industry, and many other aspects of the financial consumer market. It is their job to protect consumers. They have ruled that as equity release schemes are primarily aimed at a potentially vulnerable age group, anyone looking to make use of this service must receive full and impartial advice before they can go ahead.

As such, companies such as Equity Release Supermarket will always provide a full equity release advisory service, meeting all the rules and regulations and seeing that they are implemented. In addition, ERSupermarket only recommends schemes from companies that are members of the Equity Release Council (ERC).

Giving you peace of mind
Taking out something like an equity release scheme on your home can be a daunting task. You don’t want to make a simple mistake and end up locked into a deal which financially damages yourself or your loved ones. That is why all independent brokers will work closely with both the FCA and the ERC to provide the assurance that you will receive the standard legally required to give you security and peace of mind.

Working with you in mind
The benefits of arranging your equity release deal through an independent advisor are that you do not have to worry about them having any ulterior motives. When buying direct all the advice you receive, while matching all the legal requirements, will always lean towards getting you to buy that company’s products.

Knowing that the advice you receive meets with the regulations set down by the FCA is important, but you also want to know that it is inclusive of all your options. No one wants to have that nagging feeling that there might have been something better out there. Once you have shopped around and found the independent advisor with the best reputation, you can trust that the deals that they provide for you are going to be the absolute best for you and drawn from the entire market.

Don’t accept second best
When it comes down to it, equity release firms are required to give you all the necessary advice to ensure you know what you are doing. You might as well make sure that the company you choose has absolutely no prejudices, and will be able to get you the best possible deal out there.

Latest News from the Equity Release Market

In the recent past, the Equity Release market has been significantly earning popularity. Going by the latest trends in the market, there are signs that it is going to even grow massively in the years to come based on the increasing demand by a number of retirees. In order for you to find out more on why this product is becoming very popular in the market today, keep reading and click here for further details.

Equity Release as a product is gaining so much love from many people today since it offers home owners an essential way of tapping into the value of their homes or property without having to put them up for sale. It gives retirees who own homes the accessibility of the equity in those homes in the form of cash that they can use while in need. You can click here for further details and learn more about what these schemes can offer. It is a great tool that enables home owners to optimise the value of their homes.

Reasons for Increased Popularity

1. Equity release plans are gaining in popularity mainly due to the availability of such plans.
2. The Internet and commercials help bring these plans to the forefront engaging retirees.
3. The more recent recessions have also made it difficult to live solely on one’s pension, so retirees are seeking alternative options they might not have considered before.
4. People are also living longer, which in turn means more income is necessary and statistics from The Guardian, BBC, and other newspapers show most retirees have insufficient pension plans for their longer life.
5. Popularity is also due to the increase in the number of retirees. The generation coming up for retirement is one of the biggest generations in terms of population meaning there are currently more retirees than the last generation and even the generations to come. It is a result of WWII, when many men returned home to start their families.

Exploring Types of Equity Release

Over the period that Equity Release has been in existence, there are several types that have been designed. As a result of this, retirees are offered the freedom of choosing the ideal type that can suit their personal interests. All these types are flexible and have got different merits such that home owners can always get the best plans for themselves. The two main types available in the market today include Home Reversion plans and Lifetime mortgages.

The re-launch of a special buy-to-let equity release plan is among those statistics that you can rely on in order to know that indeed, the Equity Release market is growing by the day. The plan known as Landlord Lifetime Mortgage has been designed to enable home owners to release equity from the portfolios of their buy-to-let property. Landlords do not need to sell their homes in order to raise the cash.

Extension of the theme of the 2nd property equity release to cover holiday cottages and holiday homes is yet another statistic indicating that the product is gaining demand in the market. The extension covers those cottages and homes for holidays that are used by families. All these types enhance the strength, variation and flexibility in the mortgage market for retirees.

While these newer products to the market and resurgence of the buy-to-let concept are gaining in popularity the other traditional home equity release options are still as popular as ever.

Home reversion allows a homeowner to remain in their property under a lifetime tenancy agreement. In this situation there is no need to repay mortgage costs or interests. It is the original concept of home equity release. Homeowners are given an out to remain in their beloved home, while enjoying extra funds for their daily lives.

With lifetime mortgages there are also options from drawdown that gives you a chance to take money out as you need it to interest only lifetime mortgages where you pay the interest as you go, lessening the amount owed later on.

Click here for further details about the various home equity release schemes. Always keep up to date about what might be changing or coming into the market too. You never know when a better plan might enter the market. Financial markets like equity release are ever-changing to ensure the product works for retirees who might need a little help. With the latest news from the market you will be armed with ideas for what to do next as you approach retirement age or an age in which you need some extra capital.

Equity Release Financial Advice

After two years, the banking sector seems to have calmed down again, and whilst things have not returned to normal in regards to them lending money to home buyers, it is getting slightly better. In fact, there are now all manner of mortgages, loans and equity releasing deals becoming available. From things such as an interest only lifetime mortgage to endowments and more besides, the choice can be quite bewildering.

Therefore, it is a sensible idea to seek some form of financial advice from one or more sources. Everyone’s situation is different, and whilst re-mortgaging a home may be suitable for some people, it will be a bad idea for others.

There are many websites online which provide great, free impartial advice and these are a good place from which to do some initial groundwork. Martin Lewis over at Money Saving Expert has one such website, and it is visited by hundreds of thousands of people every week.

With the groundwork done, it is then time to get some independent advice before finally approaching a bank for a loan or other financial arrangement. An important thing to keep in mind, is that even though you may make a decision now on what scheme to use, you should really have one which gives the flexibility that it can be changed with little or no penalty.

The process is long for taking out a home equity release mortgage or reversion plan. It can take 6 to 12 weeks depending on which scheme you decide to enter into. Additionally, interest only lifetime mortgage is just one option open to you.

When you find financial advice you want to look at more than just one Internet blog, forum, or article website. It is helpful to get an idea of what you might enter into by speaking with retirees who have already gone through the process. It is also in your best interest to search around and see what myths might have appeared on various sites. In this way you can ask your adviser what is factually accurate and understand why there might be a little confusion over the entire matter.

When home reversion was first announced to the market a lot of misunderstandings appeared online. One of the biggest misunderstandings was about selling your home and then having to pay rent to the new owner just to remain in the home. Actually, what happens is that you sell a part or all of your home to an equity release provider and obtain a lifetime tenancy agreement in return stipulating no rent is required as long as you live in the house. It is only when you and anyone named in the contract move out that the house has to be sold.

As you can see from the above explanation, there is definitely cause for misunderstandings which leads to a definite need to seek proper financial advice. The interest only lifetime mortgage is an actual mortgage where the principle balance is due at your death or when you decide to move out of your home. This can mean your home has to be sold to cover the mortgage. The good news is you have paid interest towards the loan balance, so the only amount left at the time the house is sold is the principle.

Since you will have different steps to the home equity release process, you will want to have advice along the way. Here are some of the steps you might want advice on:

1. Post-groundwork advice when you have read all you can about equity release schemes and particularly about an interest only lifetime mortgage is beneficial. Advice clears up any points of worry you might have.
2. An application is required to determine if you qualify for any equity release option. It can be a good idea to explore the application with the help of an adviser to read through some of the legal jargon.
3. The next stage is even more imperative with regards to advice as it stipulates the true point of decision making. Once you are approved for a plan or plans, it is time to decide what your best option is for you and your remaining family. Here legal and financial advice on potential pitfalls can be golden.

Interest only lifetime mortgage plans are there to help you as a retiree to live your life in comfort with minimal worries. An adviser in this financial market ensures you go in with your eyes open before signing any contracts.

Advantages of Equity Release Calculator

Choosing to opt for an equity release scheme can be a big decision. Many people over the age of fifty-five are facing the prospect of spending their retirement years struggling on an income which is insufficient for their needs. Equity release can provide a way to release the money which is tied up in your property without the need to sell your home and move elsewhere. When contemplating equity release, many people prefer to research their options independently and an equity release calculator can assist with this.

What is an Equity Release Calculator?

An equity release calculator is a free online tool which assesses your circumstances to qualify for equity release schemes. They are simple to use and take a format similar to an online questionnaire. You supply basic details such as your gender and age, and financial details including the balance of your current mortgage and value of your home and the calculator will compute whether you would qualify for an equity release scheme and the amount of release sum you could anticipate.

The Advantages of an Equity Release Calculator

There are numerous advantages associated with using an equity release calculator. These include:

• Instant qualification information: Equity release is not available for everyone and an equity release calculator can check that you meet the requirement criteria and inform you instantly if this is not an available option for you. For example, the minimum age for equity release is fifty-five years old. However, in cases of joint applications, it is the age of the youngest applicant which determines if the age criteria is met. This would mean that a couple aged fifty nine and fifty four would be unable to participate in an equity release scheme until the younger partner has reached fifty-five years of age.

• Highlights other options: There are actually a number of different plans and products available for equity release. Many people limit their research to only one aspect of equity release, when in reality another type of product may be better suited to their needs. For example, draw down mortgages are a good idea for those who do not require a large initial lump sum. They allow for a draw down limit to be placed on a facility to call off funds as and when required. This can save paying interest on funds only to have them sat in a bank account earning a fraction of a per cent interest. Additionally, it can provide some confidence that additional money is available when you need it. Another example is home reversion plans. These are an uncommon type of equity release which allows a home owner to sell a portion of their home to the company. Although they retain residency rights, they know exactly how much of their property has been sold and they need not be concerned about interest rates or inheritance being affected.

• Calculates a maximum lump sum: For many people, the amount of lump sum will determine whether they wish to proceed with equity release. An equity release calculator can provide an accurate figure of how much the maximum release would be and you are then free to decide whether this would be sufficient for your plans.

• No pressure information: Many people worry about speaking to a broker and feeling pressured to make a decision. Although professional brokers will allow you plenty of time to go through the paperwork, many people enjoy the anonymity of using an equity release calculator. They can research through the information provided in their own time and take their time making a decision about whether they wish to move forward.

Using an Equity Release Calculator Effectively

In order to make the best use of an equity release calculator, there are several points which should be considered. These include:

• Check the accuracy of your information: The figures offered by the calculator are only as accurate as the information you supplied. Over or under estimating the balance of your mortgage or the value of your property can dramatically affect the amount of maximum equity release possible. Therefore, you should take a little time to check your information.

• Use more than one calculator: Each equity release calculator is linked to a specific range of products and schemes. Calculators on equity release companies websites will only have information related to that specific company’s product range. In order to gain the optimum information, you should use a number of different calculators. Ideally your chosen calculator should be linked to an independent broker who has greater access to a wider range of schemes and plans. This will increase the likelihood of finding the best possible deal.

What is the Maximum I Can Borrow?

When thinking of equity release, it is natural to ask “what is the maximum I can borrow?” For many people the amount available to borrow can be a major deciding factor as to whether they should pursue equity release or explore another avenue of finance. However, there are other considerations which should be given some thought in order to be sure that you are making the right decision for your circumstances.

What is the Maximum I Can Borrow?

There are a number of online and free equity release calculators which can answer the question of “what is the maximum I can borrow”. This figure will be based on the age of the applicants, gender, value of the property, amount of outstanding mortgage secured on the property and in some cases the health condition of the applicant(s). This information will be used to calculate the anticipated duration of a lifetime mortgage. You should expect to release between thirty and fifty per cent of the value of your property, depending on your particular circumstances.

When “What is the Maximum I Can Borrow” Should Not Be the Only consideration

Although the maximum amount may be important for your financial requirements, it may not necessarily be the best idea to opt for a plan which offers the maximum possible release. There are a number of occasions when it can be more beneficial in the long term to consider another alternative. This includes:

• If there is a more attractive interest rate: The interest on a lifetime mortgage accrues and is compounded onto the loan balance, since there are no monthly payments to balance this. Although some schemes may offer you a larger amount, it may be at a higher interest rate. Even a one per cent higher rate can have a dramatic effect on the balance of your loan in the long term. It is calculated that the balance of an equity release loan will double approximately every eleven or twelve years. While you may gain an additional few hundred pounds in the short term, it could cost thousands in the long term.
• When you don’t need all the money initially: If you have an immediate need for the funds, you may be interested in obtaining as much as possible. However, if you are asking “what it the maximum I can borrow” to simply get the best deal, there could be a better alternative. There are a number of equity release products which can present a better deal in these circumstances. For example, draw down lifetime mortgages. These offer a draw down facility rather than providing a lump sum. This allows you to draw down funds as and when you require them. Not only can this prove beneficial for those who may lose their eligibility for means tested state assistance, but you will only begin to accrue interest on the funds which have been drawn down. This could save you a great deal of money in the long term.

Factors Which Affect “What is the Maximum I Can Borrow”

The amount of equity in the property is one of the primary considerations for a lender. This is the value of your property less any existing mortgage. However, there is a very specific loan to value ratio to which the lenders will adhere. Simply because you have the equity sum in your property, does not mean that you will be able to borrow this amount.

Generally, the age and gender will be deciding factors for the amount of money borrowed through equity release. These are used to estimate life expectancy based on average trends. However, there are a number of companies offering enhanced deals for those suffering from poor health or a terminal condition. In these cases, the company will consider the impaired lifespan of the applicant and may release additional funds. In these cases a person in poor health can receive a far larger sum than someone of the same age and gender but in good health.

Generally, “what is the maximum I can borrow” is not a good starting point for an equity release. It is better to consider how much you actually need for your plans. This will enable you to be more objective about the specific plans when deciding which is best suited to your needs. Equity release calculators can provide the maximum amount which you would qualify for, but if this sum is in excess of your requirements, you may be best speaking to your specialist adviser or equity release broker about the possibility of a draw down lifetime mortgage. This will enable you to have the funds you require with a reserve, should you need it later.

Why is Stonehaven Becoming Such a Dominant Equity Release Provider?

The Halifax Retirement Home Plan allowed those over 65 years to borrow a maximum of 75% of the value of their home. They were required to only pay the interest. The amount borrowed was repaid when the property was sold after their death. Halifax however stopped this plan due to the fact that it was just a small percentage of its intermediary business. Since Halifax withdrew their Retirement Home Plan, a massive void has been created for pensioners who are seeking interest only lifetime mortgages. Some pensioners are still searching online for the Halifax Retirement Home Plan. There is now an answer in Stonehaven equity release plans.

Stonehaven equity release plans have been able to fill this void. The equity release schemes offered by Stonehaven are very similar to the Halifax Retirement Home Plan; however, these plans are available to those who are over 55 years. Stonehaven is currently one of the most popular equity release providers due to the benefits it provides to home owners. The amount they lend on interest only is solely based on age and property value. NO income requirement is made; therefore, it could be classed as a self cert mortgage, rare in today’s times.

First of all, Stonehaven guarantees no negative equity. This means that your property will be sold for the best price obtainable to repay the initial loan amount. However, if the amount obtained for the property is not sufficient to repay the initial loan amount and the solicitor’s fee, Stonehaven will not ask your beneficiaries to pay the extra costs. You are therefore guaranteed to never have to pay more than the value of your property, a major relief for your beneficiaries.

Stonehaven also guarantees portability which means that if you move to a new property which meets the requirements of Stonehaven equity release plans, your existing equity release plan with the same terms and conditions can be transferred to your new property. If your new property is lower in value compared to your previous property, you will have to repay a portion of the loan. However, if your new property is higher in value than your previous property, you can choose to increase your loan.

Other benefits the equity release schemes of Stonehaven are:

• One fixed interest rate for the entire duration of the loan
• Repayment is only required after your death or after you have moved into long-term care
• You retain full ownership of your property until it is sold

Stonehaven is not the only mortgage provider for equity release schemes. You have a variety of other options; however, they may not offer these same benefits. The fact that they have an interest only mortgage where other companies may not makes them an interesting party in the lifetime mortgage industry.

Stonehaven certainly filled a void in the interest only sphere. In most cases when you come across an interest only mortgage you have to pay the interest back with disposable income. It means unless you can prove you have extra income that you can use towards the mortgage you may be denied for the plan.

In the event you find some worrying disadvantages with the Stonehaven plan or you do not like the interest only option, you have other plans to choose from. Stonehaven equity release plans provide you a myriad of choices from standard equity releases for retirees to drawdown plans. With these options you either take a lump sum paying no interest until the end of your life or removal to a care facility, or you take money as needed with the same benefit of paying after death with the sale of your home or when you move out to a long term care location.

As you shop around, compare, and search for the plan that seems most helpful to your situation, consider the inheritance you will leave for families. Your family may want to keep the family home or they may appreciate cash upon your demise. If your family is really attached to your home they may not appreciate you selling it for a retirement mortgage like the Stonehaven equity release plans in discussion here. They may want to move in with you or supply you with funds during your retirement to ensure your home remains in the family.

These options might not be open to you and your family. It is still a good idea to discuss what you might do financially to ensure they understand the potential burden they will face. Speak with a financial adviser at Stonehaven too as a way of finding out more about Stonehaven equity release plans.