The equity release process can be a daunting prospect for senior citizens who wish to avail themselves of cash tied up within their property. One of the most common questions relates to the amount of tax free equity cash that can be withdrawn?
These days, many internet sites offer a calculator for calculating the maximum amount of equity release that can be accessed. Such calculations seem helpful to most people as it simplifies the maths of equity release. Thus, equity release calculators prove helpful if you are looking to release as much as possible and whether the equity release plan they are going for is beneficial for them or not.
Do Equity Release Calculators Represent the Best Solution?
Possibly not, as you have several factors that determine the actual results shown to you from the calculation conducted.
As previously stated, the figures produced are only as good as the website providing the calculations for your tax free sum. Care should be taken that the calculator provider has up to date loan to value figures. Not only that, some companies may represent the maximum release for those between the ages 55-60; however, another lender may lend more for the 60+ age group. The equity release calculator should always have this information in its databank.
Additionally, if one has any significant degree of ill health then higher lump sums can potentially be obtained. These ailments could include being a smoker, diabetes, heart related issues, cancer and if retirement due to ill health was taken. An impaired life questionnaire relating to your health should therefore be completed beforehand.
Another word of caution is not to assume that the maximum release is the best equity release solution. Which equity release is best is the one that is tailored to one’s individual needs. Questions that need to be asked are ‘how much am I likely to need over the first 12 months’, ‘can I take the money in stages, rather than all up front?’. Such questions would affect how the equity is withdrawn and commensurate with equity release advice that should follow.
The value of your home is one of the biggest areas that can affect the results of the calculation. You see, unless you have had an appraisal conducted within the last six months to 12 months, you are using an old evaluation. Perhaps that evaluation came from the original purchase of the house and you used an online website to calculate its current value. Maybe you looked at current sold homes in your area that are comparable to yours and then devised a price to use in the calculator. Just from all this you should understand what you receive in a maximum sum can differ greatly from the actuality.
Therefore, equity release calculators should always be used with a modicum of caution, and you should get confirmation of these figures from an equity release UK adviser.
Where do I find equity release calculators?
Finding these calculators is easy. All you need to do is an internet search for ‘equity release calculator’. Once you’ve worked out which plan will give you the best lump sum, it is advisable to check and compare all the available options. In some cases, people get offers from many equity release providers.
All you need to do is to fill in some details about yourself; the basics required are the age of the youngest applicant, the property value and any existing mortgage or secured loans registered at the land registry.
These equity release calculators help you to figure out whether or not you are eligible for equity release or not. By taking the aforementioned criteria into account will advise whether any equity can be released. These calculators are easy to use and provide all the required information you need.
Using Independent Advice
As you want to make certain you are truly getting a great deal, you will want to check your results. Finding a calculator is the easy part. So the next step would be to speak with an adviser who can help you look at the results, see where you might be a little off, and consider some alternatives like those health issues mentioned above. In the end the result will be a useful lifetime mortgage with a sum of cash you can use as you wish and when you need to use it.
Equity release is a proper way to extract equity out of your property and lead a relaxed and happy life post-retirement. Plus it is tax free money you get to use.