When you sit down with your independent financial adviser, you are bound to learn about all sorts of financial options. Not all of your options will suit your personal needs perfectly which is why it’s important to be aware of the ins and outs of the various choices.
Equity release is gaining popularity among pensioners who find themselves in need of tax-free cash. There are several equity release options to choose from, and some of the finer details may differ from one lender to the next. For the most part, homeowners can choose between lifetime mortgages and home reversion plans. A lifetime mortgage has some of the same benefits as a home reversion plan, but there are many ways in which it differs. These differences determine who is best suited for such a plan. When discussing your options with an adviser, make sure that you understand each and every term and condition associated with such a plan before you proceed.
In general, lifetime mortgages make it possible for the homeowner to release funds according to the value of their property. They will
When you are young and able to work, it might seem silly to think about what might happen in the distant future. You have a regular influx of cash, you are managing your bills, and moving forward in life. However, there comes a time when you will need to give up working. Retirement is inevitable and, as more and more people are realizing, their supposed bountiful pension pots aren’t quite as abundant as they’d hoped. Due to various financial issues, many people find themselves working through their retirement just to maintain a certain quality of life. So, instead of reaping the benefits of all their years of hard work, they are forced to continue the endless routine once more.
Another possible option for those needing financial relief would be to apply for a credit card or loan. However, these funds are known for accumulating massive amounts of interest, and you will be required to make substantial monthly payments based on how much you spent or borrowed. When taking out this kind of credit, you also run the risk of losing various
When you decide to apply for an equity release against your home, you will need to go through various plans and schemes before you find the best one for you. Not all plans are created the same so feel free to take your time and really give it plenty of thought. The plan you choose will depend on a number of factors including your financial needs, the value of your home and whether or not your home is fully paid off. If you still need to pay off a part of your initial mortgage, then you will not be able to release as much equity as you could on a home that has a zero balance with the bank.
If you decide that you wish to sell your home but you have already taken out an equity release against that property, you will need to scrutinize the terms and conditions of your agreement. While some plans allow the home owner to sell the property and pay the amount owing, other schemes do not. Upon selling your home, you will need to
For homeowners over the age of 70, home reversion plans can prove quite beneficial. The value of your home will help determine how much money you can release. The greater the value of your home, the more money you are eligible for. You will also need to decide what portion of your home you would like to sell.
Like many other types of equity release plans, home reversions allow homeowners to access to cash when they need it the most. Homeowners are not forced to leave their homes. They will be able to remain living in the home they love. This means that there are no moving costs and no inconvenience of downsizing. If you have ever moved from a larger home into a smaller one, then you will know just how tough it is to choose between things you wish to keep and those you wish to get rid of.
Applicants also have the option of receiving a lump sum, monthly payouts, or a combination of the two. Lump sums are great for moments when you need to pay for a large bill like medical expenses, home renovations, and so on. Regular, smaller payouts are great for those who are looking
Due to the financial demands that we all face every day, the number of lenders and self-proclaimed financial experts has increased considerably over the past few years. Many of these lenders are almost programmed to market or push certain products. This is due to their affiliations which may or may not be instantly apparent. For example, if you approach a bank about a loan, they will only be able to offer you information on their in-house products. Their advisors cannot advise on products offered by other lenders. Some so-called independent advisors receive incentives from certain financial institutes to sell their products. Then, finally, there are truly independent advisors who look for the best deal to suit your needs.
When you are looking for the right equity release plan to suit your needs, it might sound relatively simple. You have just a few options to compare before making your final choice. However, this is not a decision that should be hurried. When you sign, you will be bound by the terms and conditions of the contract. It’s vital that you read and understand all of the conditions as well as any fine print and associated addendums that may or may not be
Since the concept of credit was first conceived, we have seen the number of credit cards, loans, and other forms of credit grow. Banks and financial institutes regularly send out notifications and offers to prospective applicants in order to draw them in with impressive interest rates and other incentives. One popular sales tactic is to attract applicants by offering a grace period during which they won’t need to make any payments. Another one you may recognise is the possibility of a certain number of interest-free months. While you might have all the right intentions when applying for your credit card or loan, spending can easily get out of hand, interest rates can get the better of you, or other complications may occur that make it difficult to keep up with the payments.
When you have to pay several creditors each month, your budget can seriously suffer. Instead of having that little bit extra at the end of the month, you are left scratching your head and wondering how you’re going to pay all of your outstanding bills. Just keeping up with the interest on a loan is challenging enough – not to mention paying the loan off itself! This is why
Many homeowners find themselves at a significant crossroads when devising a financial plan to suit their needs during retirement. It’s never easy to think about giving up certain comforts just because your pension will not suffice. Every pension plan will leave the retiree searching for ways of cutting back on expenses. This is because the monthly payout will be considerably less than the income they were once accustomed to. It’s this financial pressure that leads pensioners on a mission to find another source of income and avoid racking up debt.
Many people think that downsizing is the key. They imagine selling their large family home and moving into something more compact. A smaller property can be cheaper than the value of their current home and maintenance will cost less as well.
However, despite these attractive advantages, there are some disadvantages that homeowners need to be aware of. Firstly, when you sell your home, the amount is subject to tax. You will need to plan to move all of your belongings to your new home and, since the new property is smaller, you will need to give up some of your prized possessions as well. The furniture in your old home might not
When applying for an equity release plan, you will be faced with several choices. One of which will involve compound interest. This means that the interest will accumulate over time and, the thought of this amount rising can be quite a scary thought. Worrying about accumulating interest need not be cause for concern. By planning properly in advance, you can make the soundest financial decisions without excessive stress.
Compound interest only accumulates if you choose a plan with this policy in place. A popular alternative includes a clause that allows you to make monthly payments in order to keep the interest down. This helps ensure that the amount you will eventually have to repay will not be nearly as high as it would be with additional interest building up for several years. For those who are particularly concerned about compound interest – the simple choice would be to opt out of it and choose to make payments each month. Find out just how much you will have to pay each month and decide whether or not you will be able to afford these payments.
It is essential that you choose a provider and plan that offers no negative equity guarantees. This guarantee
Whether you are approaching retirement age, already enjoying your pension, or simply planning for your bright future, a holiday home is a fantastic investment that should always be considered. While some people may wonder where to find the cash to pay for such an investment as an additional home, there are others who already know just how handy an equity release plan can be! By accessing the funds tied up in your primary property, an equity release plan can help make your dreams a reality!
After releasing the funds you need, you can use the money as you please. You can choose to purchase an additional property in your immediate surroundings, in another city, or even overseas!
When choosing the best location for your holiday home, it’s essential that you see this as a long-term investment and not something that will last for just a couple of years. You might feel that buying property in your home country is the best bet, or you may prefer to invest in foreign property. At the end of the day, your holiday home might just become your primary home during your later years which is why it’s so important to consider you choices very carefully.
When you begin searching for an equity release plan that will suit your needs, it is important that you also look for the right provider to make your financial dreams a reality. Given the importance of this decision, it’s a very good idea to do some shopping around. Don’t worry about offending somebody by taking time to decide your financial future. Rushing your decision might make somebody else happy but you might not make the best possible choice as a result. Look for certain specific criteria before doing business with an equity release provider.
The first point to look for is a provide that offers a plan that will suit your needs and make your interests a priority. Of course, every provider will get something out of the deal. It’s all part of doing business. However, you should not suffer to plump up their bank account. Both parties concerned should come out on top.
Independent financial advisers are your best bet. Their independence means that they have no official ties to financial institutes. This means that they can provide you with ample information and advice on a variety of plans without making you feel pressured or forced into a certain decision.
Whenever the time comes to make an important, possibly life-altering decision, it’s important to seek the best advice you can find. This means that you’ll need to look for people who are knowledgeable and experienced in the industry of concern. This is especially true when the decision you are about to make is related to your finances. Not only does your financial situation affect your future, but it also has an effect on your loved ones. Without the proper policies and measures in place, they could end up paying off any debt you may have.
When considering applying for an equity release plan, it’s always best to ask for advice from more than one professional. Think of it as shopping around. It’s not just about the different benefits offered by different lenders. It’s also about the reputation of each company. If you fail to conduct sufficient research before signing your agreements, you might end up with a less than professional equity release provider. Usually, the best place to look is online. All you need to do is run a search for the lender’s name and look for customer reviews. Take it further than simply reading the reviews on the company website.
Sales of equity release plans have risen over the past few years. In Scotland, figures from the Equity Release council state that customers took an average lump sum of £39,834. Average figures for the UK across the whole of the UK sits around £72,000 with those in the South East releasing an average of £84,000.
What is Equity Release?
Equity release schemes were first introduced in 1965 and have since gone through a number of changes. It is a method of retaining your property whilst also obtaining a lump sum or steady stream of income from the value of the property.
Who Can Enjoy An Equity Release Scheme?
If you are a UK homeowner aged 55 or older, you may be eligible to access the money tied up in your home.
What Are the Different Schemes?
There are two types of equity release: lifetime mortgages, where you can borrow money against your house; and home reversion, where you sell a share in your property.
Lifetime mortgages In a lifetime mortgage you can borrow a proportion of your property’s value and interest is charged on this sum. You typically don’t pay anything back until you die or sell your home. The interest is compounded across the period of
Property owners often wonder how they can use the value of their house to access low-interest financing. A loan or a home equity line of credit are two options available to you. To figure out which will better suit your needs, see some of the differences below.
Home Equity Loan (HEL)
A loan tapping into the value of your house is a good way to borrow money. This option allows you to get a fixed amount and receive it in one lump sum. The amount you receive is based on your home’s value, payment terms, verifiable income, and credit history. You can get it with a fixed rate, fixed term, and even a fixed monthly installment. In addition, interest payments are 100 percent tax deductible.
Home Equity Line of Credit (HELOC)
With a home equity line of credit, you do not get your money all at once. Instead, you open a revolving credit, which allows you to receive money as you need. Your house is used as collateral to open the credit account. Companies approve this type of account based on the appraised value of the property and subtracting the current balance of the existing mortgage. Some consider income, debt ratio, and credit history.
You are given a home loan when your own eligibility (mainly financial reasons) along with your property eligibility matches with the policy of the lender. We are going to talk about reasons why your eligibility to get a home loan is questioned by the lenders & they may reject your application.
1. Processing Fee cheque getting bounced – Whatever be the reason, Bankers are really sensitive about the Processing Fee cheque and its considered very sacrosanct. Ensure your account has enough funds for it to be cleared.
2. Financial Eligibility – As a thumb rule, it can be assumed that a salaried person can have 50% of his net salary & a self-employed person can have 75-80% of his monthly income, paid as EMIs for any loans. If you are already paying substantial EMIs, more than what your finances can afford, your application may be rejected.
3. Guarantor to someone else’s loan – OK so you became a guarantor to someone’s loan. In the eyes of the lender, it is as good as you taking a loan. So be cautious while doing this.
4. Age of the property – Yes, the lenders do believe in age of the property. They won’t fund a property
When you apply for an equity release, it’s not as simple as signing a few papers and receiving the money on the spot or even within a few days. There are several specific steps that need to be followed in order to make sure that everything is indeed in order. No matter how quickly you fill in your paperwork, the process that follows can never be rushed.
In fact, experts will agree that even the early stages of researching and applying for an equity release should not be rushed. It’s crucial that you seek the professional and impartial advice of an independent financial advisor. Discuss all of your options so that you can make an informed decision. It’s important to consider each of your options and weigh up the pros and cons. Not all plans are the same, and different lenders may offer slightly different benefits. Remember to read all of that fine print and ask your advisor about any hidden or additional fees. The amount of time required for this part of the process really depends on you. It is important, however, to remember that if you take a considerably long time, the value of your home may vary. If