Equity Release is a process in which a retired person increases his capital in opposition to the property value of their home and the lender gets paid once the property gets sold. Mainly, there are three equity release schemes on UK’s market. They are – lifetime mortgage, withdrawing lifetime mortgage and home reversion plans. useful reference
Lifetime mortgage – It lets you release tax free amount of cash against your land and you can spend according to your fancies without making any monthly repayments. You can relax in your place till you expire or progress into a long term basis.
Withdrawing lifetime mortgage – It works alike a lifetime mortgage with the only exception that that you can withdraw the cash, stage by stage, according to your needs. It is the most famous equity release plan and around 72% of new trade in 2011 is accounted compared to 27% for lifetime mortgages and 3% for home reversion plans.
Home reversion plans- With the help of this plan you can sell off your house in substitute for a lump sum amount of cash that you can spend whenever you want. In this case, there is no need for you to make any monthly repayments against the loan and the outstanding interest is paid fully when you die.
The concept of Equity Release Calculator
The amount of money that is borrowed from your home is denoted by simple calculations. The Equity Release Calculator is a sequence of questions asked to find out the maximum loan which is available based on different circumstances. When the calculator is used it is significant to remember that equity release loans are given on the basis of a couple’s youngest age. When the valuation of your property is done you should not estimate more or less than that of the actual amount as the actual amount of loan gets distorted.
The equity release calculator can determine the maximum amount of loan which is available surveying data from other companies. Only lifetime mortgages are taken care of with the help of an equity release calculator which determines what amount of equity is available when funds are released from your house property.
The following key points should be kept in mind while using this calculator-
-Whether you are above 55 years.
-The approximate worth of your property from which you want to release the equity.
-Whether there is an accrued mortgage on your property and the fairly accurate balance.