The definition of 'Equity' is the value of the home minus any outstanding charges or mortgages secured against the property. The equity you retain in your home is often considered to be tied up and constrained, in the sense it is unavailable to utilise. When you need to know ‘how much can I borrow’ remember that it is dependent on the market and your homeownership situation. The theory for many homeowners is that you are unable to access it without selling your property.
Using an equity release scheme, an individual can unlock some of this equity in order to gain a lump sum of money or ongoing financial income from their property. Equity mortgages are available to anyone as long as you want to pay a monthly payment that pays for the compounding interest and principle balance, until it is all paid for. However, what can you do when you are in retirement and still need money, but lack the means to pay monthly payments?
If you are reaching retirement age or even in retirement age and you are thinking about ways to improve your financial standing, or perhaps would benefit from a large lump sum of money, then you may ask yourself how much can I borrow from a lifetime mortgage or home reversion equity release scheme?
The answer to this scenario is by using the latest online equity release tools which are now provided for the benefit of potential equity release customers. The good news is there are solutions even for those in retirement or aged 55 plus. The feature of many newer equity release websites is the provision of an online equity release calculator which answers the question directly as to how much can I borrow from my property. The calculation process should be straight forward and provide the figure for the maximum equity release availability in the market. Look for a lifetime mortgage calculator if home reversion schemes are not suitable for you.
Better lifetime mortgage calculators from companies such as Compare Equity Release.com will also offer results for an enhanced lifetime mortgage. These schemes will offer bigger lump sums due to medical underwriting due to the applicant(s) having ill-health. Additionally, Compare Equity Release.com has a further interest only lifetime mortgage calculator. This is helpful should you not wish for the interest to roll-up and are quite happy to make monthly payments of interest only. The answer therefore is to shop around in terms of how much can I borrow.
The great thing about these equity release calculators is that you can find out how much equity you would be able to release from your home without actually signing any contracts or taking on any commitment. They should be free to use and you should not have to give too many personal details in order to reach a conclusion. The whole concept of these calculators is to provide a ball-park figure as to the maximum equity release.
Each company is different with the amount they are willing to offer you in a retirement equity release scheme. Some companies will only supply 20% to 44% of your home equity in a lifetime mortgage, whereas others might offer up to 70%. It is dependent on a number of factors such as your health, age, and home value. If there is a potential for your home value to increase and your health is not offering a long life expectancy you may see a higher lump sum provided under the enhanced equity release scheme.
For lifetime mortgages you can be 55 plus, as long as you are not beyond 80 years of age (according to most providers). Home reversion where you sell a bit of your home for money requires you to be 65 plus. You also have to sell the rest of your home when you move or your family will after your death. Home reversion does not have interest, monthly payment, or any repayment which can be more affordable for some retirees. You and your family should consult the equity release calculators to determine the scheme that is most beneficial and payment friendly.
If you are currently reviewing which is the best equity release schemes then it is advisable to use such an online equity release mortgage calculator to gauge both your eligibility and also how much can I borrow and benefit from. This knowledge, combined with professional and independent financial advice, will help make the equity release decision process easier. Call 0800 678 5169 to speak to an equity release adviser.
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