Choosing to opt for an equity release scheme can be a big decision. Many people over the age of fifty-five are facing the prospect of spending their retirement years struggling on an income which is insufficient for their needs. Equity release can provide a way to release the money which is tied up in your property without the need to sell your home and move elsewhere. When contemplating equity release, many people prefer to research their options independently and an equity release calculator can assist with this.
What is an Equity Release Calculator?
An equity release calculator is a free online tool which assesses your circumstances to qualify for equity release schemes. They are simple to use and take a format similar to an online questionnaire. You supply basic details such as your gender and age, and financial details including the balance of your current mortgage and value of your home and the calculator will compute whether you would qualify for an equity release scheme and the amount of release sum you could anticipate.
The Advantages of an Equity Release Calculator
There are numerous advantages associated with using an equity release calculator. These include:
• Instant qualification information: Equity release is not available for everyone and an equity release calculator can check that you meet the requirement criteria and inform you instantly if this is not an available option for you. For example, the minimum age for equity release is fifty-five years old. However, in cases of joint applications, it is the age of the youngest applicant which determines if the age criteria is met. This would mean that a couple aged fifty nine and fifty four would be unable to participate in an equity release scheme until the younger partner has reached fifty-five years of age.
• Highlights other options: There are actually a number of different plans and products available for equity release. Many people limit their research to only one aspect of equity release, when in reality another type of product may be better suited to their needs. For example, draw down mortgages are a good idea for those who do not require a large initial lump sum. They allow for a draw down limit to be placed on a facility to call off funds as and when required. This can save paying interest on funds only to have them sat in a bank account earning a fraction of a per cent interest. Additionally, it can provide some confidence that additional money is available when you need it. Another example is home reversion plans. These are an uncommon type of equity release which allows a home owner to sell a portion of their home to the company. Although they retain residency rights, they know exactly how much of their property has been sold and they need not be concerned about interest rates or inheritance being affected.
• Calculates a maximum lump sum: For many people, the amount of lump sum will determine whether they wish to proceed with equity release. An equity release calculator can provide an accurate figure of how much the maximum release would be and you are then free to decide whether this would be sufficient for your plans.
• No pressure information: Many people worry about speaking to a broker and feeling pressured to make a decision. Although professional brokers will allow you plenty of time to go through the paperwork, many people enjoy the anonymity of using an equity release calculator. They can research through the information provided in their own time and take their time making a decision about whether they wish to move forward.
Using an Equity Release Calculator Effectively
In order to make the best use of an equity release calculator, there are several points which should be considered. These include:
• Check the accuracy of your information: The figures offered by the calculator are only as accurate as the information you supplied. Over or under estimating the balance of your mortgage or the value of your property can dramatically affect the amount of maximum equity release possible. Therefore, you should take a little time to check your information.
• Use more than one calculator: Each equity release calculator is linked to a specific range of products and schemes. Calculators on equity release companies websites will only have information related to that specific company’s product range. In order to gain the optimum information, you should use a number of different calculators. Ideally your chosen calculator should be linked to an independent broker who has greater access to a wider range of schemes and plans. This will increase the likelihood of finding the best possible deal.