For many retired people, being on a fixed income can be a little difficult especially in tough economic times, with quantitative easing and high rates of inflation. This situation can be made more stressful when you are suffering from ill health or a terminal illness. However, there are now a number of equity release providers who offer enhanced schemes for people in this situation. This allows the home owner to release a greater percentage of the equity from their home because their potential lifespan has been compromised by their impaired condition. An enhanced equity release calculator can assess the details of your medical health to determine if you would qualify for an enhanced scheme.
Why Do Enhanced Schemes Vary from Standard Schemes?
Equity release schemes are designed to run for the lifetime of the home owner. To accommodate this, the lender will use various pieces of personal data including your age and gender to estimate your anticipated life expectancy based on national averages and trends. This will ensure that the interest does not accumulate too high and when compounded on to the balance of the loan, make the balance exceed the value of the property. When someone has an impaired lifespan due to a terminal illness or serious condition, they have a higher probability of passing away sooner than someone of the same age in good health. For this reason, they are offered a greater percentage of equity release. Enhanced equity release calculator tools have access to the qualification criteria for the enhanced schemes to determine if you meet the criteria and the amount of release which would be available to you.
Factors Considered by an Enhanced Equity Release Calculator
The factors which are considered by an enhanced equity release calculator can vary according to the specific company or provider. Some are restricted to terminal illnesses or long term debilitating conditions such as diabetes or heart disease. However, there are some companies which will consider lifestyle as a component of an enhanced plan. For example, smokers would be deemed to have a shorter life than a non-smoker.
An enhanced equity release calculator will also calculate your anticipated lifespan based on your basic details such as your age, gender, whether you live alone or are filing a joint application. All these factors will affect the outcome of the formula to determine the duration of the scheme. The general guidelines will still apply with an enhanced equity release calculator; therefore someone who is older will generally obtain a greater percentage of equity release than someone younger. However, if ill health or impaired lifespan is a factor it will also contribute to the calculations for the maximum lump sum available.
Using an Enhanced Equity Release Calculator
Using an enhanced equity release calculator is as simple as using a basic equity release calculator. You will still need to answer basic questions about your property and your personal details. However, there will be an additional section where the questions are focused on your health and lifestyle. Once you click through to the end of the questions, the calculator will take a few moments to collate your answers and check them against the requirement criteria for the various schemes. It will then present you with a maximum lump sum release figure and in the cases of some of the more in-depth calculators will also provide details for the plans and schemes which would appear best suited to your requirements. This will then provide the opportunity to explore the financial implications of the different interest rates and the long term costs associated with the specific schemes.
Ideally, your chosen calculator will consider all forms of equity release. This will allow you to fully explore your options to search for the best possible deal. Home reversion plans are an uncommon equity release product where the home owner sells all or a part of their home while retaining the right of residency for the rest of their lives. This type of plan is available for those aged over sixty five but it involves no form of interest or loan. With a home reversion plan, you are aware of how much you have received and what percentage of your home has been sold. This can be a more preferable option for some. It is only by using a comprehensive enhanced equity release calculator will you be aware of whether you qualify for alternative options such as home reversion.
If you are interested in equity release and feel that you may qualify for an impaired lifespan scheme, enhanced equity release calculator tools are a good place to begin your research. However, it should not replace the expert advice of a professional and specialist adviser or broker. They will be able to help you through the benefits and limitations of the various plans to ensure that you choose a scheme which is best suited to your needs and requirements.