Speaking with an equity release representative is one way to find out if you can release enough equity from a lifetime mortgage to make it a worthwhile financial product. The last several years have put retirement pensions, retirement income, and other investment accounts in jeopardy. Your retirement may be delayed or you lack the luxury you have worked hard for, unless you can access additional cash. When you own a home you are certainly asset rich; however, if you are cash poor you need a solution. To find out how an equity release provider can help you without speaking to a representative use an equity release calculator.
How Equity Release Calculators Help You
Equity release calculators can calculate the financial information you need without speaking with a representative of a lifetime mortgage adviser. Ultimately you still need to speak with an adviser to go through the equity release application process; however, you may not be ready for this. It can be time consuming to speak with an agent if you are unsure if the products they offer will work for you. An equity release calculator will help by telling you the maximum amount of equity you can release from your home, based on your age and property value.
You can also use enhanced equity release calculators to determine a larger maximum lump sum if you suffer from an illness. Your health or lifestyle choices may affect your life expectancy. You may find using an enhanced equity release calculator that you can access enough funds to once again have a comfortable retirement. Remember enhanced equity release calculators can never provide an exact amount that you are eligible for, just an approximation based on a worst case scenario. Therefore, once your enhanced equity release calculation has been obtained, the next step would be to then check with your equity release adviser.
How the Equity Release Calculator Works
First it is simple to input your age. For many lifetime mortgage products including enhanced equity release, the youngest homeowner needs to be at least 55 years of age. This youngest homeowner also needs to be the one afflicted with an illness or a lifestyle choice that could lower their life expectancy (when an enhanced equity release is needed). A lender is always going to look at the youngest homeowner to determine eligibility for an enhanced equity release, or any other lifetime mortgage product. The general rule is that the younger person should out live the oldest homeowner thus the amount of time the equity release is outstanding is determined by potential life expectancy of that person.
To arrive at an equity release calculation, the calculator also needs the property value. The value of the property needs to be accurate if you wish to get a usable number. In other words, the accuracy of the equity release calculation is based on the information you input. If you do not know the current property value you can estimate it through a variety of different methods. As long as the estimate is close to the valuation the lending company arrives at, the resulting equity release calculation you receive should be similar.
How do you find the Property Value?
Property value is based on appreciation and depreciation of the property over time. This is a figure that will fluctuate with market conditions. You can look at websites such as Rightmove, or Zoopla to see any comparable homes in your area that just sold. They should be similar in bedroom and bathroom count plus square meters. You can also look at an old mortgage document you might have to see what your home was worth 20 or 30 years ago. There are websites that allow you to use an old property value and estimate its worth today such as Nationwide’s House Price Calculator.
Adding in Health to the Calculation
It is imperative that you use an enhanced equity release calculator when you do an equity release calculation for the maximum lump sum if you have health issues. The reason is different equity release calculators provide different results. A standard equity release calculator does not include a maximum factoring in health issues. The maximum equity release you see with a standard calculator is going to be lower. The value may not fit with what you need in an equity release lifetime mortgage. If you use an enhanced equity release calculator when you have health issues it is just going to ask if you have a health problem. The maximum value can still differ from what the lender ultimately provides in equity.
You may have more than one health issue that will increase the maximum over the standard enhanced maximum sum. Also your health problem may not qualify you for any enhanced sum based on your answers. When you use an enhanced equity release calculator or any equity release calculators, keep in mind that the ultimate decision is in the lender’s hands for the maximum lump sum and the calculation is an estimate of potential equity to release.
Equity Release Calculator Summary
The equity release calculator has become the most popular tool amongst retirees looking to see how much the maximum equity release amount they can raise from their property. Without requiring any intervention with equity release brokers, homeowners can research the internet at their leisure and find out the necessary information to see whether equity release schemes can assist their retirement.
Remember the calculations shown will be generic & not personalized, so the results should only be used as a guide. If a mortgage currently exists on the property, or any form of secured lending, then these must be repaid first from any home equity release plan. Therefore, you will need to release sufficient equity to not only meet the financial objectives you had planned anyway, but also enough to repay any mortgage or secured loan.
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Alternatively, get smartER to discover which plans you’re eligible for, their real-time rates and maximum cash releases for your specific criteria.