## What Are The 2014 Maximum Aviva Equity Release Calculations For The Aviva Lump Sum Max Plan?

It is easy to give a list of potential percentage of property value results for the maximum Aviva equity release calculations; however, to understand these results fully you need a bit more than the 2014 values. You need to understand how the loan to value percentage is gained. You should also know Aviva is just one company offering products to consumers in England.

Factors of the Calculation
Homeowners need to provide two pieces of information for the calculator to come out with results. The first is age. Age is going to determine the percentage of property value, while the second piece of information, property value, is going to give a result in currency for the amount that can be lent.

The age can be between 55 and 90 years for Aviva products. The younger a person is the lower the loan to value percentage is going to be; therefore, the lower the maximum lump sum is. The older a person is the more they will be able to release.

Why Age is a Factor
The premise of lifetime mortgage products like Aviva’s is to provide a loan without a repayment schedule. Instead, the loan is repaid after the person has died or moved into a long term care facility. When the home is no longer the main residence of the person the loan must be repaid. Before this time arrives, the homeowner is not going to make a payment towards the capital lump sum or the compounding interest. There are products such as the interest only lifetime mortgage, where the homeowner can pay the interest to stop it from accruing.

As the company is providing a loan without expected repayment and with compounding interest, the company has to make sure the total is not going to exceed the property value over time. A person of 65 years of age could have 35 years left to live in their current home. It would mean the loan is outstanding for that period of time without any payment being made. The company is looking for a return on investment, but they are also held to the Equity Release Council‘s ‘no negative equity guarantee’ which states the loan cannot exceed the property value and if it does the homeowner is not responsible for paying the difference.

For this reason the younger a person is the less they will receive. The older the person the more they receive on the assumption it will be returned much earlier than someone younger would be able to.

Current Aviva Age to Percentage of Property Value Figures
The following is a table of current Aviva percentage of property value figures based on age. It shows you the potential maximum percentage available to you for the lump sum plan in discussion here.

Age – Percentage of Property Value
55 – 20.5%
60 – 25.5%
65 – 30%
70 – 36%
80 – 47%
90 – 52%

Now that you have this information you can understand the maximum Aviva equity release calculations. For example, a home worth £200K for a person who is 65 at 30% percentage of property value would receive up to £60,000. A person who is 90 would get closer to half the property value, thus closer to £100k in maximum amount.

Once you have the calculation and determine if it will work for your needs, you can take on the next step. The main point is to ensure the product can release enough equity to do you any good. If you find the maximum amount is enough, it is best to speak with an independent financial adviser who is qualified to sell and talk about equity release products.

Using an independent source ensures you are getting the best product for you. This is not always possible by talking directly with Aviva or using the Aviva calculator. You may find after research that this is the best plan. However, you also want to make certain you are doing your research in full so that you won’t find out later you could have a product that is better in terms of interest rate or percentage.

The above are just the 2014 options for one product. The maximum Aviva equity release calculations are definitely skewed towards one product. While it helps you determine if Aviva is a product to look at, always make certain you have examined the market, as a whole, before signing any paperwork. You may find something better for your circumstances.

## Switch Deals Now Whilst Halcyon Times Exist For Equity Release Mortgages

Typically, older equity release mortgages can leave you steeped in high interest charges that are simply eroding the family’s estate. While some people will continue stressing with their month to month equity release charges, others will opt to make a change in their lives for the better by considering remortgaging their equity release scheme. To swap equity release schemes can ensure a better deal for many older equity release clients.

If you find that you are wasting money and time, or someone you know is wasting their time with an old equity release mortgage plan, you may want to advise them to look to swapping equity release schemes for their own good. Performing the switch to a new lifetime mortgage plan can be easy and quick, but will also relieve plenty of stress that you are now in a better position to save the equity in your property . And the time for switching to a new equity release scheme has never been better with interest rates being lower than they have ever been. Therefore, it is the perfect time to make the equity release switch.

You may be wondering how exactly one can switch from their old plan to a new equity release scheme. The process is incredibly simple and should not take too much of your time. Have you never owned a mortgage? Did you never remortgage and transfer your debt to a new lender. Well that is exactly what switching equity release schemes is all about. Call it an equity release remortgage.

All that is required of the individual is to get in contact with an independent equity release consultant. They will review your information; take down your existing plan details in order to complete a switch plan analysis. This will give you a definite decision as to whether or not you should swap equity release schemes by comparing your old, to new plan. Ensuring that all set up costs are accounted for and any early repayment charges included within the calculation, the adviser can then roll out the news.

What benefits can come by switching equity release schemes?
One of the major benefits of switching lifetime mortgage plans is down to interest rates. Rates during the latter end of 2013 were the lowest that homeowners have seen in years; these incredibly lower rates you could save £1000′s over the long term. Another benefit of choosing this type of plan is the greater flexibility now available whereby you have the option of applying for drawdown equity release schemes with absolutely no problem. The last benefit is that the startup fees for modern day equity release plans are much lower due to the inclusion of special offers such as cash backs and free valuations.

Now, a year later interest rates are starting to edge back up slightly, but this does not take away from the benefit of swapping out your current equity release. Instead, now is still the time to ensure that you are able to change your mortgage for the better. Remember, these equity release interest rates are fixed for life, so if there is a chance, grab yourself one of the best equity release deals around which could very well be the Aviva Flexible Lifetime Mortgage Plan with rates currently as low as 5.68%. (5.88% representative APR).

There are some disadvantages to the situation too, which you need to be aware of.

Cons of Swapping your Equity Release Scheme
Like swapping any mortgage, you will have certain fees associated with the switch. You definitely need to speak with a representative of an equity release company to determine if switching to a lower interest rate is going to save you a great deal based on the fees. The good news is in most instances you will be able to save a great deal; however, not everyone is alike especially given the length of time you might have carried your equity release plan.

• Check with a lifetime mortgage adviser, who should be qualified & experienced in such matters of switching plans & possible even worked for these legacy companies.
• Overview your current case and the amount of interest that you have earned so far in the build-up of your compounding interest. A redemption statement would evidence this data
• Check to see what types of interest rates are currently on offer –usually equity release comparison websites can provide these rates & details for you
• Decide if your home value has increased or decreased. You can usually gauge valuation from websites such as Zoopla where recent sales may have been listed.

Along with interest rates becoming lower there are many areas in the United Kingdom that have suffered housing devaluation. You may currently sit in a negative equity situation, which could hinder your ability to swap mortgages. If you are lucky and your home has increased in value dropping the interest rate is a perfect opportunity to ensure inheritance for your family.

Always remember to speak with your family and consider your options. With interest-only lifetime mortgages on the market, you could swap out of your older plan and start paying a little interest to help save your family’s inheritance. Assess your situation and what saving your family home means to you before you begin to renegotiate on any mortgage plan. Also find out if you have a great deal versus newer deals, as there are cases that do.

Looking to swap equity release schemes should be undertaken on a regular review basis, particularly for some of the older equity release plans from yesteryear. There are many legacy plans from companies who have now withdrawn from the equity release marketplace. Providers that were once very popular such as Northern Rock (now Papilio Equity Release), In Retirement Services (Sold their mortgage book to Newcastle Building Society & Just Retirement, Aviva with their Index-Linked Equity Release Plan or the Norwich Union Capital Access Plan should all be reviewed. Also, not forgetting Mortgage Express who had a maximum release lifetime mortgage along with the Portman, Saffron and Godiva (Coventry Building Society).

There are so many legacy equity release plans out there, and too many to list completely, but they are all still contactable to ascertain the latest redemption statements for your adviser following the completion of a Letter of Authority.. So to enjoy lower startup costs, fixed interest rates and the availability of drawdown plans, now is the time to decide on whether to swap equity release schemes and reap the benefits!

## Important Factors To Consider Before Choosing an Equity Release Plan

Many retirees turn to equity release plans as an easier way to raise more cash to fund their retirement years. You can speak directly to an expert prior to making a firm decision, since these plans are not always the most suitable for everyone. Here are some critical points that you can consider prior to making any decision and questions that you should ask your lifetime mortgage adviser.

Discuss the alternative ways of raising the money
An equity scheme will reduce the property’s value, with a few exceptions; hence, if you are not comfortable with this then the plan may not be the best idea for you. You may consider downsizing to a smaller property; however, many people do not like moving out of the home that they are used to, and the one they have brought up children in, for the sake of downsizing.

The reason it reduces the value is that you are taking equity out of the home and will have more to pay back in the end. It may be more than your children can pay and more than is covered by any life insurance policy. It could end up in an eventual sale of the house anyway.

Selling off items that you no longer wish to keep is one way to raise some money. It might not be a lot or enough, but it is a good place to start. For instance, do you need two cars anymore now that you and your spouse/partner are retired? Do you have other property like a second home you could sell or is it smaller so you could move there instead? Do your children wish to move back home to help out? Perhaps they have a little cash they can help fund your retirement with?

Always think of the alternatives before going with equity release.

Do you have potential state benefits?
Depending on your current circumstances, you may be a qualifier for additional state help, meaning that there is no need for you to withdraw funds from your home. As you compare the different equity release schemes in the market, the adviser will bring out some of these questions and help you make a wiser decision. The last thing you want is to lose income elsewhere.

Benefits can run out, so if you can take advantage of them now you might wish to do so. On the other hand you may find that owning a home keeps you from gaining extra benefits. If this is the case you may wish to use the equity in your home until you can no longer do so. At this point you can sell your home, pay the loan back, and then gain those additional state benefits. It just depends on what is available to you and why it might be an option.

Will you qualify for equity release?
You need to understand that not all people who own a property will qualify for an equity release mortgage, hence do the comparison research and confirm that you do qualify. For one, you must be aged 55 – 95 years and own a home worth at least £70,000 or more depending on the provider. There is a further criterion each company uses hence you must always check eligibility before submitting an application, as you do not want to be wasting hard earned money on a valuation fee.

You should be aware that the above are standards. They may not apply to each company. Some companies may stop giving out lifetime mortgages when you reach 75 meaning you need to attain it before this cut off age. Other companies may be willing to offer someone 99 years of age a helpful retirement plan. Compare the age, health options, and the value needed in your home to find a solution.

Are there equity plans that fit your needs?
There are various plans that you can explore and are provided by FCA (formerly SHIP) registered companies such as Stonehaven, Just Retirement and Aviva. Such companies have access to an equity release calculator to determine how much you can release from your home. Interest rates vary depending on the lender concerned and with some companies it can be affected by age. The property value is the key determinant as to how much as a percentage of its value you can get.

If you do not understand how equity release works, you need to first research the subject which can be undertaken online and requesting a free guide to equity release. However, if you are fully aware of what equity release entails, then go ahead and find your local equity release adviser and submit an application to enable you to enjoy your retirement lifestyle.