If Looking Towards Retirement Finance an Equity Release Calculator Might Present a Solution

As the UK is experiencing a rapidly ageing population, more people are struggling to maintain their lifestyle throughout their retirement. With the current economic climate, there are even fewer potential avenues for monthly income generations, left available for those approaching retirement age. This can leave many retired people facing extreme stress as they face the possibility of a long retirement with very little disposable income.

Equity release products and schemes can present a viable solution for many of these individuals. However, there is such a wide variety of schemes and differing qualifications, that a great number of people are confused by whether they could release sufficient capital from their home to provide an adequate financial solution. With an equity release calculator, UK residents are able to gain an insight into the possibilities equity release may facilitate.

•    Why are the figures different?

Equity release schemes are generally based on a lifetime mortgage. There are strict rules governing these types of financial products in order to comply that no individual owes more than the value of their property or leaves a debt to their estate upon their death. With an equity release calculator UK home owners can collate the information for a number of factors and which will help to illustrate how much equity would be available for release.

•    Isn't it easier to consult an adviser?

While there are a number of advisers and brokers who have the qualifications and experience to advise clients on the feasibility of equity release many people are hesitant to explore the options as they are unsure that they would qualify for equity release or release sufficient funds. This is especially applicable when a home owner has debts or an existing mortgage on the property, as people believe that there may not be enough money released to pay off any remaining debts and provide financial assistance to meet the needs for a comfortable lifestyle. Since in a number of cases, this would require a sizeable amount, the home owner may feel they are wasting their own and an adviser's time to take this route further. click here for further information.

•    How can an equity release calculator help?

In using an equity release calculator, UK home owners have generally been able to gain a unique insight into whether equity release would be beneficial for their circumstances. It can confirm whether equity release is a feasible method to raise capital from their property without needing to move home. Since equity release schemes allow the home owner to retain their right to reside in the property, this can provide a great solution in a good number of cases. Using the initial figures produced by an equity release calculator, UK home owners can then seek out a professional adviser to explore their options more fully.

•    What factors are used for the calculations?

There are a variety of factors considered when using the calculator. This will include the age of the home owner or owners, the current value and location of the property, the amount of debt or mortgage remaining and any pre-existing medical conditions of the applicants. When the information for these factors is collated, it can allow the calculator to compute the feasibility of equity release for the specific circumstances and the amount of equity which could be potentially released.

•    Why are these factors applicable?

The majority of schemes have strict guidelines which must be complied with in order to grant equity release. While the age of the applicant and value of the property are the main factors in a lifetime mortgage, other factors can influence how much an equity release provider would be willing to finance.

For example, generally for applicants aged eighty or over considering a lifetime mortgage, the provider may authorise an equity release of up to fifty per cent of the value of the property as the loan amount. Age is one of the determining factors as the interest for the loan will accrue on the loan since no monthly payments are made and the total debt will continue to increase until the property can be sold when the applicant passes away or goes into a long term care facility. At this time, the property will be sold, the loan paid off in full and any remaining funds are left to the beneficiaries.

It is important to consider that when using an equity release calculator, UK home owners will only gain an illustration of the potential equity release available on a lifetime mortgage. There are other more specialised schemes which have different criteria and may offer a different solution. Companies such as Equity Release Supermarket offer the use of calculators which will provide the maximum potential loan amount available and this may vary according to the specific conditions set by your chosen equity release provider.