For a great number of people, the prospect of compromising on their lifestyle to manage on their pension or trying to find the funds for long term care can be incredibly daunting. However, there are a number of finance options which are available and specially designed for the over fifty-fives. Equity release allows home owners to release some of the equity in their property without the need to sell their property. There are a great many providers offering equity release schemes and many will often provide an equity release calculator program or tool to assist their potential clients.
How Equity Release Works
Equity release schemes will generally be based on a lifetime mortgage. This works in a similar manner to a conventional repayment mortgage but instead of making monthly payments, the interest is accrued and compounded onto the balance of the loan. The balance of this loan only becomes due for repayment on the death of the home owner or if they move into a long term care facility. At this stage, the property is sold with any remaining funds after the loan has been repaid being passed on to the beneficiaries of the estate.
How the Equity Release is Calculated
While many people are aware of the requirements for conventional repayment mortgages, since there is no monthly repayment with equity release schemes, the requirements are slightly different. Of course, the loan to value ratio is still important, where the value of the property, less any existing mortgage, is assessed against the amount of loan. So if you have owned the property for many years with little mortgage, there is a possibility of a substantial amount of equity being released. However, there are other requirements and deciding factors which determine the amount of equity release available. These include gender, age and current medical health. This is because the scheme is designed to be a loan for the remainder of your lifetime, so the provider will need to gain an estimate of your life expectancy to determine the estimated duration of the scheme.
How an Equity Release Calculator Program Can Help
An equity release calculator program can help home owners to determine the maximum amount of equity release sum that they would be eligible for. This will provide a figure based on your individual circumstances and it can people decide if this sum would be sufficient. It can also help to speed up the application process, since you will already have an awareness of the figures involved and have been supplied with initial information. If you decide to proceed with the application process, when you meet with your broker, you will be able to demonstrate that you are aware of the equity release process and provide examples of the best deals you have been able to source. Your broker can then search for deals which compare favourably.
Other Benefits of Equity Release Calculators
There are a number of providers and companies offering equity release schemes. While this increased competition is great for ensuring that there is an abundance of great deals, it can be a little challenging to compare the schemes and plans. A number of calculators will allow you to enter your details and they will then supply a number of schemes for your comparison. It can allow you to explore the different variables and interest rates offered to assess the implications of each scheme. This can allow you to gain a wider perspective on the equity release industry and make informed choices with your specialist broker.
Additional Factors the Calculator May Consider
There are different versions of sophisticated equity release calculator program, which will consider other factors when providing an equity release figure. While all will base their calculations on the older the applicant, the greater percentage of equity can be released, there are a number of programs which have the details for enhanced schemes. These enhanced schemes take the medical history of the applicant into consideration and may allow a higher release figure for those suffering from a serious or even terminal medical condition.
Equity release can be a great solution for retired people who have limited financial options but require additional funding. An equity release calculator program can provide a very fast figure of how much equity you could release from your property, which makes researching your options easier. Of course, you should still consult with a professional equity release broker or adviser and ensure that a professional property appraiser determines the current value of your home to determine an accurate figure. Calculators can enable home owners to conduct a great deal of their own research and speed up the application process. However, it is important to compare the restrictions or limitations of all your options before committing to one specific scheme or plan.
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