There is some confusion about equity release schemes, with many people believing that the benefits are available to any home owner over the age of fifty-five. Unfortunately, this is not the case as there are some eligibility criteria which must be met in order to apply for an equity release scheme. This can be very confusing as there are several different factors which need to meet the criteria, so many people use an equity release calculator tool, which can not only determine your eligibility but also the potential equity release which would be available to you.
Confirming the Required Criteria
The equity release calculator tool will ask for a number of personal and financial details in order to confirm that you meet the required criteria, before providing any kind of values for equity release. It will check your age, since the applicant must be over fifty-five. However, a number of people making joint applications may find that they fail to meet these criteria, since the application will consider the age of the younger of the two applicants. If you wish to pursue equity release, you will need to wait until both home owners are over the age of fifty-five. Age can also be an eliminating factor for home reversion plans, which will generally have a minimum age requirement of sixty-five. The calculator will also determine if there is sufficient equity in the property by deducting the current mortgage from the value of the home. There is a specific loan to value formula which must be met and large existing mortgages may mean that your application fails to meet these criteria.
Confirming the True Value of Your Home
Generally, the equity release calculator tool will also ask a number of questions regarding your actual property. In order to qualify for equity release, your home must be in good condition and of standard construction. This provides assurance to the equity release lender that your home is a good form of security for the loan. However, these are not the only criteria to assess the true value of your home. All applications must be accompanied by a property survey, in order to determine whether your home is at risk of flooding or has some other pertinent structural issues.
When entering the estimated value of your property into the equity release calculator tool, it is a good idea to be as accurate as possible. It is worth taking the time to research similar properties in your area which have recently sold. There are a number of online websites which offer property price information based on a collation of sales data. This will help to gauge the current property market in your area and provide a current market value.
The Importance of Accuracy
In order to know the true value of equity release in your property, it is important to ensure that all the information you enter into the equity release calculator tool is as accurate as possible. Even the most sophisticated of calculator tools work on a mathematical approach rather than a speculative one. The calculator cannot judge whether you have over or under estimated the value of your property. It simply takes the figure you have entered and applies it into the pre-programmed mathematical formula.
If you are considering equity release, it is worth obtaining up to date and accurate information in order to determine a true value for your equity release. Ask your current mortgage lender for an up to date mortgage balance figure; compare sold properties in the area which are similar to yours and ensure that you answer the calculator questions as precisely as humanly possible. Only by ensuring accuracy can you have confidence in the figures which are supplied by the calculator.
An equity release calculator tool can be extremely useful to determine the true value of equity release available to you. It can be a quick method of determining whether you meet the basic qualification criteria and if your home has sufficient equity to make equity release possible. The calculator tools use the same mathematical formula to determine the maximum equity release available as the equity release lenders and companies, so it can be an ideal way to assist you in making the decision about going forward. However, if you are considering equity release, it is important to realise that even the most sophisticated of online tools will not replace the advice and guidance offered by a specialist broker or adviser. They will be able to provide more in-depth information about products and schemes which may not be available online and can help you to be assured that you are getting the best possible deal which is suited to your specific circumstances.
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