Tag Archives: Equity Release Council

Why Equity Release Calculator Interest is on the Increase

Equity Release, , , , , , , , ,

Financial markets change based on interest in the market. During the recessions England just went through, a few things occurred. One, no one was spending any money. Secondly, money was tight due to lost jobs, lost investments, and overall many foreclosures occurred. This created an issue for all financial products including equity release. Most needed money, but the outlook was not too great. This has changed with equity release calculator interest on the rise. In the first half of 2014, 10,000 equity release products have been sold according to recent news releases. Furthermore, websites are showing more traffic to their equity release calculators, as more people rush to see if there is a potential product available for them.

Calculating the Interest of Consumers
Lifetime mortgage and a home reversion company are seeing renewed interest in their products. Already for the first half of 2014 approximately £641 million has been attained in equity release with about half of that amount in quarter 2. This is about the same as ten years ago, and the highest numbers seen since the subprime mortgage crash occurred.

All of these stats are coming from the Equity Release Council which prove there is a reason you might wish to look at equity release if you are having issues with funding your retirement.

Funding your Retirement Better
Most individuals have sustained such losses in the last few years that retirement is going to be hard when it comes to money. While there is enough now, as the person lives longer they will run out of cash. Being cash poor, but property rich is a good thing. If you have yet to hit this point but know it is coming, you can do something about it by using the equity release calculator. The fact that equity release calculator interest is up is also a good thing for other reasons.

Interest in these calculators ensures they are online for you to use and they are free. It also means the websites supplying the calculators are going to keep up to date information handy for you. While some websites might stagnate and not update for current market products, there are those which continue to ensure you have more accurate details.

It allows you to find products of use to you, get an accurate picture of equity you can release, and then decide if you want to speak with a broker.

Benefits of Calculators
Besides the obvious result in figuring out if equity release is right for you, these calculators are available 24/7. You can do research in your own time. It makes it easy to get answers when a brokerage firm is closed. You cannot always reach a broker qualified in equity release because they close the office and go home for the night.

It also gives you a chance to figure out if the product is right for you or if you need to consider other alternatives. There is nothing fun about going through an entire process with a broker to find out in the end they cannot help you. It can still happen even using the calculator but it definitely happens less often.

Entering Information Appropriately
It is up to you to enter the information into the equity release calculator that is accurate if you want a depiction of actual options. You will need to use the youngest homeowner’s age. Even if you are 65, if your spouse or significant other is 55, you need to use that age providing they are able to sign a loan or have to be involved for home reversion to work. It all depends on who actually owns the property. If you are a single home owner and your other family is not mentioned on the property title then you can use your age.

Next you need proper home values. You can get these online as well by searching Zoopla and other sites for recent sales that are similar to your home. This value needs to be as accurate as possible because the property value of your home is going to determine the amount of equity you actually have to release.

As long as you have these numbers, you can use the calculator and then seek out independent broker advice when you are ready for the next step. The above are reasons equity release calculator interest is on the rise particularly because there is a possibility for you to get funds in retirement that will help you keep your current lifestyle without being too costly.

How Far Has The Lifetime Mortgage Evolved?

Equity Release, Lifetime Mortgage, , , , , , , , , , , , , , , , , , , ,

The concept of lifetime mortgage to release the equity held in one’s property initially started somewhere in the mid of 1960s. It is based on a simple process to use the value of your property without having to move out of it. These schemes were not as popular then, as they are today because they were neither systematic nor regulated, which gave birth to several poorly devised products called Shared Appreciated Mortgages that made it look like a poor product in those times. Even today, we cannot forget the stigma that still lingers on amongst today’s elderly population in 1990s.

The government understood the need of regulating equity release schemes to provide consumer protection after the sad events that happened in 1990s. There was a need to protect the consumer rights which motivated the introduction of Safe Home Income Plan, abbreviated as SHIP. It laid down certain voluntary measures to be followed by the institutions offering these lifetime mortgage schemes to get their schemes included under the scope and definition of SHIP. Ship has now been superseded by the Equity Release Council (ERC) which lays down the precedents by which all equity release firms & advisers must adhere to.

These new equity release schemes that meet the ERC criteria have to leave the consumer with the right to repay the loan at anytime which secured against the mortgage of the property, if they want, although against some early repayment charges may be levied. It is even mentioned at www.equityrelease2go.com that all the lifetime mortgage plans must have the inclusion of no negative equity guarantee, so that the consumers need not worry about the liabilities stretching beyond the value of the property. With the increasing flexibility and portability, the consumers even got the rights to move to a houses freely and either transfer the equity release scheme or repay it.

All these schemes are today regulated under the guidelines laid down by FSA as well as Equity Release Council. In 2004, the Financial Services Authority fully regulated these schemes as well as the institutions offering these schemes so as to guard the interest of consumers at large all across UK.

Home reversion plans were merged with lifetime mortgages under the guidance of FSA in 2007. Today, these schemes offer greater flexibility to the consumers, enhanced plans for people suffering from several health ailments as well as the options of only paying interests through the interest only lifetime mortgage plan.

Lifetime mortgage schemes have evolved today as one of best products available, in the right place, at the right time to enhance the lifestyle of people even beyond the age of 55.

Is It Hard Releasing Equity From Your Home?

Equity Release, , , , , , , , , , , , ,

It is not at all hard to release equity from your home under the given market conditions. Releasing equity from your home can be a straight forward event under the right advice from brokers or independent financial advisers. It is important that you seek advice only from the qualified and approved independent financial advisers. They can help and guide you in understanding all the key features as well as the associated risks related to the different equity release schemes regulated by the Equity Release Council.

The eligibility for taking an equity release on your home in not difficult. You must be at least 60 year old for opting a home reversion plan, however the minimum age for lifetime mortgages is defined as 55 years by most of the equity release providers. You must also own a home in UK, which is in reasonable state and free from any outstanding mortgage.

If the house is under some shared arrangement with your spouse or partner then the equity release can be taken jointly by the consent of both the partners. Moreover, in joint occupancy cases, the age of the youngest homeowner must be at least 55 years. The process starts by fixing an appointment with a financial independent adviser or broker. Financial adviser will recommend you some equity release schemes depending on your individual requirement and financial state.

The application process for releasing equity from your home starts by filling an application form with the help of your financial adviser. He will also help you to submit the form to an equity release provider along with the required fees. The equity release provider will appoint a RICS qualified surveyor to visit your home and do the valuation of your property after your application form is received.

An offer will be made to you stating the amount that can be borrowed and your solicitor will help you understand all the legal terms and conditions attached to it. You as well as your solicitor will be required to sign the acceptance form and send it back to the equity release provider. After completing all the legal checks and formalities, the equity release provider will release the funds to your solicitor who will assist you to get the money transferred in your account.

Are Equity Release Schemes Safe and Could I lose My Home?

Equity Release, , , , , , , , , , , ,

Equity release schemes have been around in some format since the 1960’s. However, they have undergone significant changes to ensure that today’s equity release mortgages are complaint & trustworthy in the eyes of the over 55 marketplace.

The first steps towards recognition of the need for consumer protection came in 1991 with the launch of SHIP (Safe Home Income Plan). SHIP brought about a voluntary code of practice that must be implemented within any equity release scheme in order to achieve SHIP status: –

  • The flexibility to still be able to move house. Therefore the equity release plan must be portable
  • You can repay the equity release mortgage at any time, subject to potential early repayment charges
  • All plans must have the inclusion of a ‘no-negative equity guarantee‘ option

The no-negative equity guarantee provides the protection in an ‘over’ roll-up situation, where the equity release balance supercedes the value of the property in the future.

If this does occur the lender will invoke the no-negative equity guarantee and only ask for the property value on eventual sale. This provides the reassurance that no debt can be transferred onto the beneficiaries.

Since then, the FSA (Financial Services Authority) has become involved in the equity release market & taken all schemes under its wing.

Therefore in 2004, lifetime mortgages became fully regulated by the FSA & provided greater consumer protection. This led to only qualified equity release advisers being able provide recommendations to the general public.

Three years later in 2007, home reversions plans were amalgamated with lifetime mortgages resulting in both types of plans becoming regulated by the FSA.

With recent developments in the industry & SHIP now reforming itself into the Equity Release Council to have a stronger presence & stance within the post retirement market, then greater changes are to follow. This in turn will lead to greater consumer awareness of equity release schemes & their benefits to the over 55’s.