There are a great many home owners who are over the age of fifty-five but unaware of the potential benefits of equity release. This particular age group can struggle to obtain conventional finance due to their age and fixed income during retirement. However, equity release has been specifically designed for this age group. A tax free lump sum or additional monthly income is available through equity release schemes. Calculator programmes and other tools are readily available to work out whether equity release is feasible for you.
The Advantages of Equity Release Schemes
There are numerous advantages associated with equity release schemes. Calculator programmes can provide details of how much money would be available, but you may be unaware of the other advantages. These include:
- No monthly payments: Equity release schemes are designed to run for the remainder of your lifetime. There is no need for monthly payments, since the interest is accrued and compounded on to the loan each year. The balance of the loan is only due for repayment when the property is sold, upon your death or if you should move into a Long Term Care Home.
- Right of residency: All equity release schemes provide a guarantee of residency for the remainder of your life. Regardless of the percentage of equity you have released from your home, you are entitled to live in your home for the rest of your life.
- Tax free lump sum: The funds received through equity release are tax free. You can also use the funds for any purpose. Many people use their equity release lump sum for purchasing a holiday home, supplementing their pension or inheritance planning and assisting their children or grandchildren financially.
Using an Equity Release Schemes Calculator
An equity release schemes calculator is a free online tool which can provide confidential information about the types of scheme you qualify for and the maximum amount of release which would be available to you. There are a number of factors which determine how much could potentially be released to you. Primary factors are your age, gender and the value of your home. However, the amount of the outstanding balance on your current mortgage can affect the amount of available equity in the home. Some schemes will even take into consideration your health status, if you have a terminal condition or a history of poor health.
These factors create quite a complex formula. An equity release schemes calculator is pre-programmed with a formula to calculate the feasibility of equity release. They are simple to use and all you need to do is complete the questions posed. These questions will ask personal information about your financial situation and health but this information is necessary to generate an accurate figure.
Choosing a Good Equity Release Schemes Calculator
When choosing an equity release schemes calculator, the choice can be a little overwhelming. There is a wide variety of calculators to choose from. This can make it a little difficult to be sure that you have chosen a good calculator. However, there are a number of tips to ensure that you have chosen a good service. These include:
- Don't rely on one calculator: In order to gain a perspective on all the available schemes, it is a good idea to use multiple different calculators. Ideally, you should use five or six calculators from different companies and brokers to be sure that you have access to the best possible deals.
- Don't just use companies you are familiar with: Although you may come across household names as equity release providers, don't just stick to the calculators from these companies. The equity release schemes calculator on these websites will only cover the specific company's schemes. These may not represent the best possible deals.
- Check an independent broker's calculator: Independent brokers have access to a wider range of equity release schemes from throughout the marketplace. There are a number of independent brokers who have a sophisticated calculator which will not only take multiple schemes and providers into consideration, but will allow you to compare the results.
- Ensure your information is as accurate as possible: An equity release schemes calculator does not have the capacity to check property values, existing mortgage details or other information. It will base the calculations on the information you have supplied, so it is important that you ensure your information is accurate as you possibly can make it.
If you are considering equity release, it is important to assess the market fully before making a decision about whether you would like to move forward or consider other options. An Equity Release Schemes Calculator is an excellent starting point for your research and when used properly, it can help you to be assured that you have left no stone unturned.