Are you dreaming on going on a once in a lifetime holiday? Do you spend your day thinking of buying your dream car? Or would you like your retirement to be filled with all the adventures and activities which you could not do in your younger years while spending all your time maintaining your stable job to secure your future? It is not uncommon for a number of people to reach retirement age and find that their pension fails to provide the right level of income in the real world or find themselves having to make compromises to their lifestyle which they regret. For these people, retirement can mean a limitation of options with conventional financial products. However, with equity release, they can access the benefits of their hard work in securing a property without the need to move home. Although many people may be hesitant to commit to explore their options further with a specialist broker, a lifetime mortgage calculator can provide a quick insight into the feasibility of this option.
Lifetime Mortgage Benefits
A lifetime mortgage can provide a number of benefits for home owners aged fifty-five and over. These include:
• Releasing the equity tied up in the value of your home, without needing to move out.
• Provision of a flexible financial arrangement including lump sum payment or additional monthly income for the remainder of your life.
• Funds can be spend however you choose.
• You can plan your retirement and future to your desired lifestyle without needing to source another form of income
• You can conduct inheritance planning, assisting your loved ones now and ensuring that there is minimal inheritance tax to be paid on your estate.
Taking the First Step
The first step in considering any finance solution is needing to know how much cash it can actually raise. Equity release is no different and you will need to know what funds could be released from your home. This is actually quite a complex formula which relies on a number of factors such as gender, age, value of property and state of health. For this reason, many people use a lifetime mortgage calculator to obtain a figure of how much could be released before proceeding any further.
While some information may appear obviously required, it is worth providing accurate information for any questions on the calculator. Health and lifestyle can be a large determining factor in the size of release available. Unlike other financial products where ill health may restrict your suitability or incur a larger premium, in equity release, a history of poor health may attract a greater amount of equity release when compared to someone of your age in average or good health. The reason for this is that lifetime mortgages are designed to run for the remainder of your life. Older people and those in poorer health are deemed to have a lower lifespan and therefore the plan will be in effect for a shorter period. The answers you provide to the questions posed by the lifetime mortgage calculator will generate an average estimated life expectancy which will then be applied to the loan to value calculations.
The Virtues of Using a Lifetime Mortgage Calculator
Many people may think that the first step in pursuing equity release should be to consult a professional adviser. However, there are numerous virtues to using a lifetime mortgage calculator. These include:
• Quick and accurate clarification of the requirements: You will have an immediate answer of if you do not meet the age criteria or have insufficient equity in your home, without wasting time on phone calls and adviser appointments.
• Instant figures for your calculations: Many people have an idea of how much money they will need for their plans. The calculator can provide a figure for the maximum possible release to allow you to make accurate plans and calculations.
• Details of alternative options: The calculators will generally provide the details for a number of schemes which may be suitable for your requirements. You can then assess the implications of different interest rates, restrictions or terms.
• Speeds up the application process: Specialist advisers and brokers must comply with the regulations of the industry and ensure that their clients are aware of the implications of equity release. By going into the process having researched your options, your adviser can be assured that you understand the process and move forward finding you the best possible deal.
If you are considering equity release, the lifetime mortgage calculator (found here) can provide a helpful insight into your options. Although it does not replace the advice of a professional broker, it can allow you to explore your options and ensure that equity release is right for you.
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