Tag: Lifetime Mortgage Plan

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.

Understanding Your Choices
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!

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.