Tag: Long Term Care

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.

Independent Financial Advice
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.

The Importance of an Equity Release Property Valuation

A Stonehaven equity release plan is a great way for people to obtain an additional source of capital in retirement. If you are considering applying for a Stonehaven Equity Release plan, one of the most important factors that will decide how much money you are eligible for is the property valuation. Property valuations are a standard part of the equity release application process. An estate agent can be of great assistance during the property valuation process.

Seek Independent Advice
It is also recommended to seek the advice of a qualified equity release adviser before the property valuation process. An equity release adviser will help you to obtain a good idea of the value of your property prior to application so that you have a good idea whether the amount you require is practical.

Property Valuation Options

• The internet is also a good resource to find realistic ideas of the current value of properties especially of properties that are similar to yours.
• Another good idea to consider during the property valuation process is to request a market appraisal from your local estate agent. These can usually be obtained free of charge.

Location Matters to Equity Release Lenders
Apart from the valuation figure, Stonehaven will also be interested in the location of the property. If your property is located on a large council estate, you might have some difficulties obtaining a Stonehaven equity release plan since Stonehaven do not like properties to be located on a large council estate. You might also experience difficulties if your property is located on areas that are designated as flood risk areas. Stonehaven does not accept properties that are located on flood risk areas either. Check the environment agency website for more details on flood areas.

Factoring Valuation at the End
Property valuation is not only important during the equity release application process but it is also important when the property is being sold. Normally, the property is sold at the end of the equity release plan which normally occurs when the borrower dies or has moved into a long term care home. The property is normally sold to repay Stonehaven Equity Release.

In most cases, the property would hopefully have increased in value. A final property valuation needs to be conducted to obtain the current value of the property for which it can be sold. This would be at the end of the equity release mortgage term, once death or long term care has been attained. Once the property is sold, Stonehaven is repaid and the remaining amount goes to the beneficiaries. In most cases, the beneficiaries would be the children or grandchildren of the borrower.

Focusing on Financial Product Benefits
For the most part the focus has been on valuations and what will happen if you decide equity release is right for you. There are other things you should consider before you hire a company to do an evaluation of your home particularly if you will need to pay fees for this valuation.

There are benefits to equity release:

• Tax free cash
• Having money during retirement to live on
• Going on holiday
• Helping out your kids
• No monthly payments necessary

You can use the money in any way you want which is great. It means you can have those holidays you always wanted. You can also enjoy a little improvement to your home. For many improving their home is the purpose of such a loan so they can increase the value of it for their children.

Disadvantages to be Wary Of
Depending on the amount of loan you take out you might threaten the inheritance left behind for your family. This is why adding to the value of your home is a good idea if you can afford it with the loan. If not there are ways to ensure you protect your children’s inheritance such as an inheritance clause in the agreement. It is always a good idea to get advice about the potential clauses that will reduce the negative effects of an equity release.

You also do not want to use this method if you truly want to leave the home in your family. If the home does not matter, you might also want to consider home reversion. Home reversion sells the home while you are still living in it. You retain a portion of the home and a lifetime tenancy agreement. In exchange you have funds to live on, but you do not have a mortgage payment you have to worry about in the end. This is another way to guarantee a money inheritance is left for your family members.

To receive an estimate of property value contact our team today on 0800 678 5159 and make certain to mention Stonehaven equity release is a product you are looking at so they know which company to send the estimate to.

The Versatility of Modern Day Equity Release Schemes

The process of releasing money or equity out of a primary residence without moving out is called ‘equity release’. Seniors who desire to free up money for different purposes choose this method as it allows them to have money in their pocket which they can use for different purposes. If you are living in the UK, you can arrange to get equity release as early as when you hit 55 years, but there are also limitations since you can only release so much at that age. Ideally, the older you are the greater the lump sum you get from equity release loans.

The main reason why people choose equity release loans is to raise money, which in turn will help improve their standard of living. The reasons could be for a multitude of different purposes, ranging from home improvements, helping the kids, holidays or even having an emergency fund in the bank.

In the past, people used to release equity to enhance their pension, go on holidays, and make their retirement years much more pleasurable. If you have a major project that requires cash in a lump sum, this will be a great idea; for instance, buying a second home in the UK or abroad, or to simply enhance your retirement package.

Other people take up equity release loans for real life situations that need accomplishing. For example, there are those who take up the lump sum to pay off a mortgage and consequently increase their monthly income, while a long waiting list for a hip replacement or other similar surgery may prompt one to take up equity release.

You might also choose to use the money to help family members buy their first home, do your own home improvements, or replace a family car. You can also choose to invest the money in property abroad which then allows you to travel away and have time with your children, especially if they are not living close to you. You might also consider buying a motor home and having fun travelling all over. The principle of equity release is to have money and spend it on what you want.

When people choose this option of raising funds, usually they do not have any other options left, or the other options are too expensive or inconvenient. In its infancy, people tended to use equity release for lifestyle reasons which effectively were optional and not a necessity. However, more and more seniors today are using the equity release facility to enhance their pension, or to fund their long-term care or help their children in financial crisis or for business purposes. These new era requirements have become more of a ‘need’ rather than a ‘want’ in the current economic climate.

Given this era of need you will definitely want to compare the different plans that exist. You may find that there is one solution that best fits your requirements. You may be older than 55 and wish to have more money released than a person would get at this age. Perhaps you have a health issue? If there is something attacking your longevity, there is a solution.

You can take out an enhanced lifetime mortgage. You receive a larger lump sum than you typically get. You also have the funds to make your life as comfortable as possible. If you are not taking out a loan to help pay for your expenses or help your children out, consider an interest only lifetime mortgage.

An interest only lifetime mortgage is designed to make taking out equity cost effective. You pay the interest that accrues each month on the loan. You do not pay the balance like any other option; however, you also do not add more to your principle balance. This keeps it at a reasonable level and an inheritance for your family.

Once you reach 65 you have an alternative to equity release loans in the form of home reversion. This option ensures you do not owe any more debt now that you are in retirement, but you do have cash to spend. You just have to sell your home, not always something most retirees are comfortable with, but still it is a choice.

Before one embarks on an equity release plan, it is important that they involve an independent financial adviser who can guide them on the best equity release method depending on their own unique circumstances. Generally, people aged above 55 and who own a property can use equity release loans, and the amount of money released will largely depend on their age and their health condition.