After a lifetime of study and work, the elderly people are both rewarded and protected by a series of measures many goverments implement in a regular basis. Retirement pensions are the most common scheme in these cases, but it isn’t uncommon that aged people are also provided with other benefits including lower health costs, special insurances, and other sorts of monetary aids or special pricing regimes.
The idea behind these aids is that the elderly have more needs than young people, in aspects like health, transportation and accessibility. In some cases, these measures also aim to compensate the insufficient payments from retirement schemes.
Nowadays the retirement system seems quite out of balance due to an aging world changing the proportion of retirees when compared to the working population. The system can get easily saturated and overwhelmed by the increasing number of elderly citizens. Even though public pensions are the classsic scheme for retirement financing, private providers are slowly taking more and more space in the business as some goverments start to fail in providing financial aid for their retirees.
Some of the most common, non-retirement related benefits for the elderly people include special prices in goods and special payment schemes, medical benefits for pensioners, diferential tariffs in public transport, special loans with more convenient terms, and special discounts.
Now, are these benefits enough for the life standards that retirees want to keep? Some people living on a pension face no economical struggles and even are able to afford a nice retirement home abroad in the countryside, or travel around the world having fun here and there, but what about those who live in a tighter situation?
The retirement scheme is meant to solve, or at least minimize, problems related to the aged population with a monthly income and, perhaps, some extra benefits. However, any study of pensioners will show that the elderly do face, in fact, many troubles be them or not money related. In our world, having an extra penny in your pocket can make a huge difference in our lifestyles, our satisfactions and the kind of experiences we can reach. Even problems that aren’t directly related to money, like isolation and health issues, can be at least partially solved with a higher income. More money allows the elderly to access better services, to pay for things they need, and to afford transportation and care.
In cases when pensions aren’t enough, it is understandable that the elderly look for other ways to finance their own lives, especially since an increased life expectancy means that retirees can enjoy decades of life, pursue new projects and try new things before their passing.
So what are the options that retirees have? For now, we’ll briefly discuss one of the best schemes for getting financial aid, which is specifically aimed for people over 55 years old.
Equity release schemes appear as a very valid and very popular option for retired people who want to boost their lifestyles, access new things or simply experience an economical relief, with more margins for any eventuality or anything they’d like to get in the future.
The concept behind an equity release scheme is very simple. When you engage in an equity release deal, you contact a lender who will give you a lump sum - or in some cases, a steady extra income that you can add up to your retirement payments - in exchange for a portion of the ownership of your property.
There are different schemes of equity release, the most popular of which being lifetime mortgages and home reversion plans. There is no option better or worse than the other, it depends on your particular case. How much you’d like to make, how old you are and other circumstances of the like.
Equity release is especially convenient for people who don’t have heirs, or don’t mind not leaving a big inheritance to their descendants. When the borrower dies or moves to long term care, the house is sold and a portion of its value is used to pay the loan of the equity release. If you engage in such a deal, you can still inherit something to the next generation, but the value will be decreased after you pay the lender the part you agreed about.
If you are a retiree and would like some extra money to live a better life, then we advise that you at least consider the possibility of releasing some equity from your house. Do a little research and see whether or not this plan is for you.
Equity release schemes are financial options that allow you to draw a certain amount of money from your property for the rest of your life. The plan is to sell part or the entire home while you are allowed to still stay in it rent-free for the rest of your life. This equity is available to home owners in lump sum, periodic payments, or both depending on the terms you agree upon. Home equity loans and credit lines are quickly gaining popularity among pensioners as they add money to your pocket, enabling you to live comfortably after retirement.
Equity release is typically given against the main residential property. However, recent developments in home equity lending have seen lenders come up with a scheme that allows release of equity on qualifying rental or second homes. Based on the standard product range, equity release providers offer either a flexible lifetime payout plan or a lump sum on a second or buy-to-let home.
There are several factors that are considered before a second home qualifies for equity release. Some of the basic requirements include the following:
• The home owner(s) must be 60 years or older
• The property value should not exceed £70,000
• The property must be in Wales, Scotland or England
• The amount released is based on the age of the home owner
• The release is dependent on each lender’s loan-to-value criteria
Typically, equity release service providers give about 20% of the home value to any home owner who is 60 years old. The value released rises steadily up to about 50% for anyone above the age of 90. However, these terms are constantly in review, with the most recent change being a drop in 10% loan-to-value. This means that a 60 year old home owner can only get 10% equity release on their second home or buy to let property.
In order to know the exact property that you can release equity from, it is important to know how service providers define a second home or a buy-to let property.
According to a leading equity release service provider, a second home is a property that is available for the sole occupancy of the home owner of a let out of a maximum of 4 consecutive weeks. The property must be used by the home owner at least 4 weeks in a year.
Buy To Let Property
This is property that gives the home owner rental income. In such a case, there must be short hold tenancy agreements as well as proven rental income. The rental income should be enough to cover the interest charged by the equity release service provider since you are using your home as collateral. Many lenders are still too shy to release on these types of properties. However, it is only a matter of time before a lender decides to tap into this growing market.
Typically, equity release is a scheme that allows you to sell part or all of your property while you continue to live in it rent free. As such it is important to be cautious about whom you deal with and how you deal with them to avoid losing your house and desired income. Keep in mind that every growing financial solution has unscrupulous dealers lurking around waiting to pounce on ignorant home owners. Therefore, you should know about Home Equity Lines of Credit.
There are a few things you can do to avoid falling into the hands of fraudsters or lenders who use unlawful, unfair and deceptive practices to get you hooked. Look out for the following signs:
• Does a lender constantly encourage you to borrow more or continually refinance your loan? With every refinancing, you will pay more fees and charges which increases the size of your debt.
• Does the lender pile up unnecessary insurance packages on your loan? With every insurance package is a loophole to get more from you.
• Does the lender attract you with reasonable terms only to change them once you are ready to sign the contract? There may be tons of hidden charges in the new contract.
• Does the lender give you the amount you an amount based on the home value as opposed to your ability to make the required payments? If you cannot make a repayment, you will soon lose your property.
• Does the lender give unconventional terms such as unreasonably lower repayments? This increases your debt in the long run. You can seek mortgage debt forgiveness should this happen.
When looking for an equity release service provider, be sure to deal with only those with a reputation for professionalism. Do your research to avoid digging yourself into a hole you cannot get out of.
Equity release has been on the table for a while as an option for elder people to refinance their lives or boost their lifestyle by adding extra cash to their personal economy. In some cases, it is a way out from debt, high bills or some other form of monetary restraing. In others, it’s just a money cushion in case something happens and the borrower suddenly needs some cash. Sometimes, its sole purpose is to finance a lifestyle change, a long trip, home improvement or other activities of the like.
Whatever the case is, when the first equity release deals appeared, they quickly gave the scheme a bad name. These sorts of loans were unregulated and many were scammed in one way or another. Fine print, high interests, negative equity, overwhelming debt, hidden charges, you name it. People started to slowly walk away from equity release, as it was seen as nothing more than a malicious scheme to rip old people off their precious money and properties. In other ways, black hat lenders were taking advantage of vulnerable people for their own self gain. There were plenty of equity release court cases, when people tried to defend their ownership and their captital against those with whom they had made an agreement in the past, but since regulation was poor, there wasn’t much certainty the judge would rule in their favour.
However, things changed. Government offices started regulating the activities of equity release lenders and laws were written on the subject, in the UK as well as in other countries where these lenders were offering their services. People started to return to equity release schemes, since now they were safer. Recent measures taken by the government, like the no negative equity guarantee - which assures that the total amount of the debt, including all fees, and interests, will never be higher than the value of the property - keep covering the borrowers with layers of protection.
Even if the scenario is now very different from what it was in the 80’s, there is still a lingering negative image about equity release deals. However, some of that bad fame is based on an old state of things that is no longer a reality, and there are also myths about equity release that need to be exposed as untrue so people can decide whether or not they want to engage in such a deal, knowing the truth and making choices based on it.
People sometimes fear that they wil lose their properties if they engage in a deal, and be left in the streets when the evil and fearsome lender comes to collect the money. As a matter of fact, it is stipulated in equity release credit agreements that the lender has absolutely no right over your property before you die or move to long term care for good. Equity release defaults also worry many people, and they did prove to be dangerous in the past, without the strong regulations that are enforced today. The borrower is protected, especially if there is a standing no negative equity guarantee, which most lenders offer as a competitive service.
SEC fillings of equity release lenders are now more complete and cover all relevant aspects of the lender and borrower roles in equity release, as well as what happens to the money and the property in controverted cases.
Depending on the scheme you’ve chosen, when you engage in an equity release scheme you might have to pay some money every month - in example, in the interest only mortgage schemes - or even no money at all until your house is sold. No negative equity guarantees should keep you out of debt if you meet your monthly payments, but even in that case for a reason or another you might fear that you won’t be able to do so, and your debt would grow and grow in front of your eyes.
With the right finance management scheme, you should have no problems. Can you remortgage expensive equity release loans?Yes, you can, if you find a lender that offers convenient rates. Hopefully, you won’t need to go that far, if you choose your equity release lender wisely to begin with. Refinancing an equity release loan with another sort of mortgage may help you regain posession of part of your property, but don’t forget that some lenders will impose you penalizations for early repayments. You need to discuss this with your lender before you agree to any sort of deal.
If you do things correctly and get proper advice, you shouldn’t have major problems with your equity release scheme.
In the 1980s, many people lost money after engaging in equity release schemes. Basically, they would borrow money from an investor and pay with the value of their house after they died or retired to long term care. At first, it seemed like a very good idea: getting money and not paying a penny for as long as you lived in your own home, and then giving it up when you no longer needed it. However, high interest rates and bad calculations on the side of the bowrrowers led to bad situations and many people started seeing equity release as a bad decision, a last resource at best.
However, a long time has passed since the 1980, and now, with stronger regulations and a more fierce competition among lenders, equity release has actually become a very good option to help for older people to stay in their homes while grabbing some extra cash from the value of their property. A recent assessment for older occupiers executed in Northern Ireland showed how a wide range of providers actually offered good deals to their clients, with reasonable interest rates, some of them flexible, voluntary repayment options and several guarantees so their borrowers would be - and feel - safer with their economical situation and even their inheritance in some cases.
Overall, equity release deals offer a good opportunity for elder people to improve their lives, pay debts, cover their expenses when on low fix income, increase the value of their property with home improvement, and/or any other thing they would want to do with that money.
The difference between fix or flexible interest rates is a matter of economical context. Some people might prefer fix rates since they already know how much they’re going to pay, which helps them with their own financial planning. However, fix rates can backfire sometimes. In the 1990s and early 2000s, with house price inflation all over the place, fix interest rates were very beneficial for borrowers since the value of their home increased more than expected, so they were more likely to keep some value from the property to inherit to their children. However, the subsequent downfall in market prices had the complete opposite effect and they lost money.
Some measures were taken so equity release deals would be less dangerous for elder people’s financial balance. The FCA No Negative Equity Guarantee was a huge landmark in this. Basically, what this guarantee, offered by all reliable lenders, states is that no matter the fluctuations in house price over the years, and no matter the interest scheme taken, the total debt would never be superior to the value of the home, even if that means the debt should be cleared with a payment lower than expected, at the expense of the lender.
This guarantee is especially important in flexible rate plans, because it is much more difficult to predict how much the final total amount of money will be owed to the lender. With this extra safety guard, people can feel more free to take on flexible rates, which can adapt more to the fluctuation in market prices. Flexible rates rise and decrease with the general costs, so they remain more proportional to the actual value of the property. A good combination of flexible rates, a good quotation and a No Negative Equity Guarantee is the best plan any borrower could ask for.
One Family is a mutual organization that provides several financial services to the community, including lifetime mortgages as well as other loans and financial schemes. What’s great about this organization, with about 2 million members, is that it offers eight different equity release schemes from where you can choose the one that is more convenient for you.
One Family offer lifetime mortgages, with the lowest minimum interest rate in the market, of only 2,96%. Other plans have different rates as well as specific terms that make them all unique. When consulting about the best plan for you, you should ask for information on all of them so you can find the one that is most convenient for your particular situation. You are sure to find something that fist your wishes perfectly.
It was a very strong move from One Family to offer such low minimum interest rate, in a flexible plan that is, of course, protected by the No Negative Equity Guarantee. When you choose One Family as your lender, you can rest assure to have the most convenient rates in the market, as well as a number of flexible options so you can find the best equity release plan for you.
Equity release plans are financial options offered to people above 55 years old. In most cases, those who cannot access other financial facilities such as loans can decide to sell part or all their property to get a lump sum or periodic payments as long as they live. Equity release schemes allow the owner to still live in the house regardless of the portion of its value from which they have drawn equity.
Drawdown is a equity release scheme that gives you the freedom to withdraw your tax-free cash in periodic payments rather than in lump sum. This scheme is convenient for people who need equity release cash for their day-to-day expenses. Once you sign up for drawdown, you are required to state the amount of money you need for your initial withdrawal. The rest of the amount is saved in your cash reserve facility.
To qualify for this equity release scheme, you need to be above the age of 55. In addition, you are required to own a home. You can visit a drawdown equity release lender to help you asses your qualifications.
The lender begins by calculating the amount you would have in your cash reserve facility. Once this is done, you are asked to state the amount of cash you would like to withdraw before your money is put in a cash reserve facility.
After placing the application, you only need to wait for two weeks before your money is deposited in your bank account. You can then withdraw any amount as you wish, as long as it is not less than £2,000. Once the amount is over, you are required to submit an application in order to have more deposited.
Drawdown equity release scheme differs from other plans in two ways. First, while other equity release schemes have a schedule for how to withdraw money, drawdown allows for people to make flexible withdrawals.
Secondly, while other schemes are set to last throughout the applicant’s life, there is a set time for drawdown.
Drawdown allows you to withdraw your money at any time. This allows you can get the amount you need to cater for urgent needs.
This scheme has a considerably lower interest rate as compared to other lifetime mortgages. Drawdown equity release could help you save money and have enough left for your children or beneficiaries to inherit.
The interest charges for drawdown only apply to the amount of money you withdraw. The cash in your reserve facility is not affected.
With drawdown, you do not have to worry about losing the ownership of your home. You still get to own 100% of all your property. Withdrawals made in form of drawdown do not attract any administrative charges.
You only have to wait two weeks to find the amount remaining the additional drawdown facility in your bank account. Drawdown works faster than other equity release schemes.
While other equity release schemes are available to you for the rest of your life; or until you are incapacitated, the guarantee for drawdown only sustains you for a stated period of time.
Drawdown money lenders are allowed to take away people’s cash reserve facility if the economy is in bad condition. Therefore, you cannot fully rely on the cash you get from the scheme.
Drawdown equity release interest rates are set with respect to the applicable percentage at that time. The rates may be higher or lower than expected; hence you cannot really know what you may be charged when you make your next withdrawal.
Due to the limit on the maximum cash reserve facility, you cannot always get the amount of hope for. When the amount saved in your reserve is over, you have to make another application drawdown application. This may be an inconvenience if you need the money urgently, as you have to wait a while for the entire process to be completed.
Drawdown equity release lenders are allowed to set a limit for the maximum reserve facility. Some lenders may use this freedom to restrict your reserve facility. In this case, you may have to settle for less money than you need.
Draw-down equity release is a greatly beneficial scheme for retired folk. It offers you the financial freedom you need, and a chance to plan your future as well as that of your heirs and beneficiaries. Applying for drawdown would allow you to continue earning income just as you did while you were working. This, however, is better due to the flexible withdrawal.
Once you have been allowed to get drawdown, you need to be careful with how you manage your account. Be aware of the inconveniences that may come up, such as your reserve facility being withdrawn. It is advisable to make sure you have a separate source of income in case something goes wrong, or if you have an emergency while you are waiting for additional money to be deposited.
The finance industry can be easy or hard to navigate depending on what you know and how you use that information. Every business owner knows that the secret to success is in the relationships and partnerships built over time. Customers, both internal and external, are the cornerstone of every successful venture. It is for this reason that many companies seek to create and maintain vital professional relations. One such relation is with professional introducers.
This is mostly a professional financial adviser who introduces clients to preferred service providers. They work as intermediaries between clients and service providers. Their work is to recommend specific financial solutions that fit your current circumstances and link you with service providers offering what you need. It is a simple and straightforward relationship that is built on mutual trust, dependability and loads of professional relations built over the years.
It is not uncommon to see financial services providers officially seeking to work with a professional introducer. The success of a relationship between a financial introducer and a service provider is wholly dependent on how well the service provider does their job. This is because their performance will affect the introducer’s reputation as a professional and knowledgeable, unbiased advisor.
There are countless financial services providers who are looking for professional introducers. You may be tempted to work with the highest bidder. But before you make an agreement, here are a few things you should take into consideration.
• The services they are offering
• Your expertise in the services being offered
• The service provider’s reputation
• The commission plans they have in place for introducers
• Direct access to sources of information
• Business reciprocity
• Accessibility of the services by potential clients
• Professionalism, communication and feedback loop
It is advisable to know a service provider really well before placing your name on their services. Keep in mind that their services will affect your reputation. Choose to work only with service provider whose reputation builds yours as a professional financial advisor.
There are countless financial services in which you can deal. The secret is to choose those you are conversant in, and in industries in which you have already formed a reputation. Some of the financial products you can deal in today are:
• Mortgages and other real estate services
• Equity release schemes
• Work and other related government benefits
• Financial and debt management plans
• Investment and insurance plans
• Taxes – deductions, exemptions and relief plans
The financial industry is as vast as any other. Therefore, it does require sound industry knowledge, legal understanding as well as updated information on industry trends and customer demands if you plan on being a success.
Financial introducers are advisors. While the regular term for advisors mean that they mostly do not work with preferred service providers, introducers give the same professional advice accompanied by the recommended companies you can work with.
Equity release schemes are among the products whose information is most sought after, next to taxes and government benefits. These schemes, as seen on Equity Release, are an easy way for home owners to get cash from their property as they live in it. One such fantastic product is the drawdown equity release scheme.
Drawdown equity release scheme, alongside several other options is simply a financial product that allows you to keep getting a salary as if you are still working. The payments are done monthly (or as preferred) from a portion of the property. The payments are remitted as long as the homeowner is alive. This is one of the most sought out products as it helps supplement the amount received in pension and other government benefits for pensioners. You can read more on other equity release solutions available today and take your pick.
There are no regulations per se that directly involve financial introducers. However, it is important to note that no reputable company will want to deal with someone whose integrity and professionalism has not been proven. This is because they will be responsible for the introducer’s information about what they offer as well as be a face for their company to the clients they are bringing in.
Independent introducers or financial advisors, however, are subject to various legal requirements. If you plan on starting out your career as a financial advisor, you need to check out the official government websites to know how to go about it. You can contact your local government officer to help you get started.
You can never go wrong with extensive experience and loads of professional relations in the finance industry. This is because generations are seeking financial solutions day in day out; you are always assured of business. Keep in mind that you can only sustain that business by being dependable. Therefore, focus on your reputation and you will be assured of good, profitable business.
Brexit comes with a myriad of consequences, top among the speculations being the crashing of property prices. As is the case with everything else, there are two schools of thought; one that believes the property market is as solid as it can be while the other believes it is in imminent danger of being unprofitable.
Domestic property owners are in a state of panic, which has made them dispose off their property after the vote determined the imminent exit of England from European Union. Contrary to expectations that the market will drop due to the pull out, it is now flooded as foreign investors rush in.
As the pound weakens from the Brexit vote, countless European buyers are rushing in to dip their toes into Britain’s post EU property market. Most want to take advantage of the indecision that surrounds the whole Brexit situation and cash in before the pound regains its strength.
Euro zone buyers gained a £42,000 discount on the average house price in London in the wake of Brexit referendum result, numbers that a London estate agent, Stirling, provides. The discount is due to the depreciating sterling which brings down the cost of the property even though nothing much has changed in the selling price.
Overnight, London property has become a global hotspot for affordable property, especially for those paying in Euros. The concerns over euro zone’s stability has been on the minds of wealthy French and Italian investors who are now looking to invest in London’s property market. To them, London property is a stable asset in sterling currency. Despite the uncertainty, wealthy investors from the euro zone have stepped in to reduce the property demand gap left by domestic buyers pulling out of the market following the outcome of the Brexit vote.
Various commentators and politicians have bandied figures around in their effort to predict the property market. Chancellor Osborne warned that the property prices could fall by up to 18pc by 2018 following the Brexit vote. The decline rate, however, is solely dependent on today’s market rather than what it will be in 2 years, which is forecasted to rise by 10pc from what they are today. According to treasure, the worst case scenario would be an 8pc price decline.
Brexit is assumed to cause a technical recession, which will see a hike in property prices, making home ownership expensive. The costs could still be unaffordable despite the efforts of other main street lenders to offer alternative services to cater to the demand.
Buyers losing confidence in the market makes the situation worse, thereby reducing the demand and creating a plunge in the property prices. The increase in borrowing costs will make it worse for domestic investors to buy property. All this volatility and uncertainty following the Brexit vote can result to a hit in the financial market.
With London being the hardest hit, it has become less attractive to local home buyers after the Brexit vote. The added possible curtailing of immigration could also decrease the demand for housing, which is likely to slow down price inflation of the property as well as affect rental growth. This would be the ideal time for first time buyers. However, despite the low prices, if the borrowing costs are high, it would affect affordability for a majority of the people.
The fact that many local investors are pulling out gives international investors a chance to have a ball. The UK is home to countless foreign nationals. In fact, 40pc of London’s residents are foreign nationals and slightly more than 11pc of UK’s population is from the EU. These foreign born nationals are majority property owners in some areas such as West End and Mayfair in the UK. However, if Brexit results into stricter immigration requirements, the competition from foreign investors would go down, leading to a drop in property prices. This is because many foreign nationals are uncertain about their future in the country, and are less likely to make a risky investment, which leads to lower demand.
If you have been looking for the right property to invest in, by all means possible go ahead with the transactions. Property buyers looking for long term gains will reap the gains of the nonchalance to such changes. These property buyers, who chose specific locations to settle their families, are less likely to sell their property over small political changes.