When making a financial decision it pays to know some facts beforehand. Have you ever made a purchase, almost made a purchase, or came close to something only to find after several hours of talking with people you are unable to finish the deal? With lifetime mortgages and equity release products like home reversion there are qualifications you have to meet. Once you meet those qualifications you also want to know if it is a viable option for you. Instead of talking with a sales person who might take a lot of your time, waste it even, you can get what you need by using an online equity release calculator.
Using the Calculator First
Mainly using the calculator first means you do not waste time speaking with numerous brokers, potentially getting turned down, or worse go through the whole process to realise insufficient funds will be made available to you should you go through the equity release process. Furthermore, there is not just one company offering you these products. There are companies like Aviva, More2Life, Pure Retirement, Just Retirement, and many others. They all offer a competitive product based on a niche market or a target market. This means one company might offer you lifetime mortgages if you are 75, but nothing if you are 55. Another company might provide a loan to anyone over 55, as long as the youngest homeowner is at least 55 years of age.
Given the different products on the market and the numerous equity release companies, it could be a drastic amount of time you waste trying to find the right scheme. If you throw in the four lifetime mortgage options that just adds up to more time you need to spend discussing things with independent brokers.
By using the online equity release calculator before you start your independent broker conversation, you can eliminate some of the wasted time. The calculator tells you right away if you can release enough by giving you the maximum equity release amount. This tool ensures you narrow down the best plan on a website designed to give you independent information.
Lifetime Mortgage or Home Reversion
Home reversion is a sale of your home in full or part. You decide how much you wish to sell. In return for the sale you live in the home until you die or you move out into long term care. When you move out or pass away, the house portion unsold is then sold to the buyer. They pay out a percentage of market value, then turn around and sell the house for a profit. You get to live in the home rent free, so it is a good situation for some. You do lose control of the full home.
Lifetime mortgages are loans with compounding interest. The same rules apply in that you live in the home until you die or wish to move out. At the time you move out you will have to pay back the loan and the interest in full. Typically, a house sale is necessary to cover the loan.
Lifetime mortgages are sold as lump sum, drawdown (with an equity account to draw from), enhanced (impaired or ill health), or interest only (pay interest each month but no principle amount is paid).
The type of lifetime mortgage that seems the best for you will need to be used in the calculator. Results for the impaired equity release calculator will be different than those using a lump sum. This is because the maximum amount for an impaired lifetime mortgage is more than the maximum for a lump sum lifetime mortgage. It is assumed someone with health issues will die and thus repay the loan earlier than a healthy person.
Prior Knowledge Gained
Now that you understand why using the calculator first is important, you can begin to further your research beyond the results. You can start to look for independent brokers who are qualified and regulated by the Financial Conduct Authority (FCA). These brokers are able to give you advice about all products on the market rather than one from a specific company.
You can speak intelligently about the product best suited for you as you have a guide from the online equity release calculator. The results you are given are just a guide or potential estimate. A broker will take what you give in detail about your home, age, and situation to try and find a better product or narrow down your options, thus the estimate can change.