The Benefits of Interest Only Lifetime Mortgage Calculators

For those considering equity release, you may have come across an interest only lifetime mortgage calculator. These are free online tools which offer to calculate the maximum lump sum you would be eligible for and what plans you would qualify for. Many people are reluctant to provide their personal information to these tools. However, there are a number of benefits associated with this readily available and easy to use tool.

The Benefits of an Interest Only Lifetime Mortgage Calculator:

Quick qualification information: Equity release schemes such as lifetime mortgages have specific qualification criteria. This is slightly more complex than other forms of conventional financing. An interest only lifetime mortgage calculator can provide quick information about whether you meet the qualification criteria. This can save a great deal of time for those who would not yet qualify and allow them the opportunity to decide whether to postpone equity release or pursue other options. For example, many people are unaware that equity release lenders consider the age of the youngest applicant in joint applications. This would mean that a couple aged fifty eight and fifty four would be ineligible for equity release for at least another year.

Highlights the implications of interest rates: An interest only lifetime mortgage calculator can be an excellent way to highlight the implications of different interest rates and specific plans. You will be able to see the long term costs involved in committing to a lifetime mortgage plan in order to make an informed choice about proceeding forward.

Compare plans: Many of the more in-depth forms of calculator allow home owners to compare different plans and products. This can allow the home owner more control and information to make informed choices. By exploring the implications of different plans and products you can explore whether it would be more beneficial to opt for a plan offering a slightly amount of release or one which offers a more attractive interest rate. While many people are interested in obtaining the maximum amount of release possible, an interest rate of even one per cent lower can significantly reduce the overall long term cost, which may make it a more attractive deal.

How to Make the Best Use of an Interest Only Lifetime Mortgage Calculator

Interest only lifetime mortgage calculator tools provide an extremely useful research resource. However, there are a number of guidelines to make the best use of these free tools:

Use more than one calculator: An interest only lifetime mortgage calculator is restricted to being linked to the specific product range of the company or broker. This may not represent the best possible deal for your circumstances. In order to obtain a better insight into the marketplace, it is best to use more than one calculator. Ideally, you should also incorporate using a general equity release calculator into your research to double check that a lifetime mortgage would be the best type of equity release for you.

Double check your information: Calculator tools are purely mathematical. They have no capacity to check the validity of your information. Therefore, there is a responsibility for you to double check your information. You should spend a little time researching property valuations in your area to ensure that the figure you enter for your property value is as accurate as possible. Additionally, request an up to date balance from your current mortgage provider. Both these factors will affect the amount of equity in the property and inaccurate information will compromise the reliability of the results from the calculator.

Plan out how much you actually need first: Many people begin their equity release research by looking for the amount of release sum which would be available to them. However, it can be a good idea to calculate how much you actually need before you begin. This will give you an indication of whether a particular scheme would be sufficient for your needs right away before wasting any more time researching. You may be pleasantly surprised by the amount of equity release available to you, which would give you more options on your flexibility which could provide a better deal.

If you are considering equity release, an interest only lifetime mortgage calculator can be a good starting point. However, it is important to realise that it should not replace professional advice. The calculator can provide the information you may need to make an informed choice about whether you would like to apply, but a professional adviser will be able to assist you in assessing the specific benefits and limitations of your chosen plan.

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.