Archive for the ‘Equity release’ Category
No Negative Equity Guarantee - Equity Release
It is one of SHIP’s most popular and recognised equity release guarantees. But what does it mean to the customer?
The no negative equity guarantee is a set-in-stone rule of SHIP governed equity release plans. It means that you will never owe more than the value of your home - no matter what.
Historically, house prices have always risen over long periods of time. Logically, this makes sense too as the population grows over time, thus increasing demand.
However, what should happen if property prices fall over the long term? The fixed interest rate will guarantee that your initial loan will grow exactly in the manner illustrated when you took out the plan. If property prices were to unexpectedly fall, then there may be a time in the future when the loan amount is higher than the price of the property. Fortunately, with a no-negative equity guarantee, the maximum repayable amount will never exceed the price of your property - even if the difference is very sizeable.
This can give you and your loved ones peace of mind that there is no debt left to your estate as a result of you taking out an equity release plan.
Use our equity release calculator to compare rough estimates of the amounts offered by the major equity release providers. Or for a more detailed and personalised comparison, call 0800 012 4180 for a free, no-obligation chat about equity release.
Debt Management Plans & Equity Release
Equity release is fast becoming a preferred route for many who find themselves in debt management plans. Debt management plans are a popular way of managing debt which could otherwise spiral. However, they are a solution that still requires regular monthly repayments. Equity release is particularly attractive in these cases as there are no monthly repayments to make. The amount one can release with an equity release plan often exceeds the average debt levels of those in a debt management plan; leaving the customer debt-free with extra capital to enjoy life and enough equity left in the home to leave an inheritance to loved ones.
Use our equity release calculator to compare rough estimates of the amounts offered by the major equity release providers. Or for a more detailed and personalised comparison, call 0800 012 4180 for a free, no-obligation chat about equity release.
80% of Equity Release Plans Sold Through Advisers
According to the Safe Home Income Plans industry body, 80% of equity release plans are now sold through advisers - compared to the remaining 20% being sold direct from the lender. Taking a look deeper into this, it is easy to see why.
When you approach independent financial advisers for advice on equity release, they are able to find a plan suitable for you from the many out there, rather than try and match the plans they have to your circumstances. Not only this, certain plans have different characteristics and requirements - such as the minimum age. If you opt to go direct, you may find yourself talking to an adviser with little experience of your situation, shaped by the limited range of plans they can offer. If you talk to an independent financial advisers, particularly equity release specialists like Responsible, you will find that there aren’t many situations that we haven’t come across because of our whole-of-market status.
You may find that the figures turn to 90% soon enough.
Use our equity release calculator to compare rough estimates of the amounts offered by the major equity release providers. Or for a more detailed and personalised comparison, call 0800 012 4180 for a free, no-obligation chat about equity release.
As pension funds prove insufficient, more seek out equity release
The Pensions Policy Institute released a report on retirement income today, suggesting that pensions may be insufficient to achieve the quality of life that pensioners desire or require.
The PPI research director, Chris Curry, had this to say
“Many median earners who contribute to DC [defined contribution] pensions at average levels of 10 per cent of salary are unlikely to have sufficient state and private pension income to achieve a desired standard of living in retirement.”
As many equity release experts have been saying in recent years, traditional retirement financing faces many challenges. However, UK pensioners can remain very optimistic in rising to the challenge. Many are sitting on large amounts of equity in their homes. A change in perspective can often find new ways to meet the demands of modern life. Equity Release can now be seen as a first-choice tool in financial planning.
Use our equity release calculator to compare rough estimates of the amounts offered by the major equity release providers. Or for a more detailed and personalised comparison, call 0800 524 4839 for a free, no-obligation chat about equity release.
Prudential Withdraw From Equity Release Market
It was announced yesterday that Prudential are pulling out of the equity release market come the beginning of next year. Whilst this may come as a shock to those who see the exponential growth of equity release happening as we speak, it is tempered by the fact that it seems to be a corporate operations decision rather than one to do with the market itself.
A lack of access to the appropriate funding required by the equity release market was cited as a potential reason by the Financial Times.
The Director General of Safe Home Income Plans had the following to say:
“In the current economy finding sufficient funding is an issue that many organisations face and this shows that equity release is not immune to these issues.”
Prudential have announced that the terms and conditions for all their existing customers will be honoured, it is just new business that they are stopping.
Aviva and Just Retirement, two of the three major equity release providers, have come out and declared that are very much still in the equity release business and are excited by the equity release market.
For more info read http://www.ft.com/cms/s/2/3614480a-d8f0-11de-99ce-00144feabdc0.html
Who are the Best Equity Release Candidates?
The question, who are the best equity release candidates, is a difficult one to answer because there are so many reasons to want to take out an equity release plan. What was usually associated with cruise holidays and buying an extra car, is now associated with everything:
Helping family out through hard times
Renovating the house
Upgrading the car
Buying second homes nearer family
Taking trips to see loved ones
Paying off debts and mortgages
Or simply supplementing household income so meeting the bills is not a chore every month.
Whatever the reason, the best equity release candidates have some idea about what they need the money for.
If you are thinking about equity release, why not call up for a free, no-obligation chat on 0800 524 4853
Head of Pensions Policy Institute Predicts Equity Release Growth
In an address based at a seminar by the Pensions Policy Institute, Niki Cleal predicted that equity release was to grow significantly once more retirees were aware of the potential of unlocking the equity in their homes.
The idea was that whilst there remains a very large of equity tied up in the properties of over 55s, many were simply not aware of planning tools like equity release.
Ms Cleal stated:
“Income released from housing wealth can often complement other forms of income in retirement.”
As other, more traditional, methods of retirement finance have become more unstable, the demand is expected to increase. It might be that the ‘other forms of income retirement’ that Ms Cleal talks about are the ones that complement equity release, rather than the other way around.
If the current growth trend continues, it is expected that over 80% of retirees will shortly be owner-occupiers of homes, allowing for a much greater chance for more people to release equity from their homes.
It seems that recently, equity release is starting to catch people’s attention and it is being talked of more and more as a potentially integral part of retirement planning.
If you are thinking about using equity release to help fund your retirement, why not call up on 0800 524 4853 and find out what the latest interest rates are, how they apply to you and which plans you may be eligible for.
Alternatively click here to use our equity release calculator to find out whether you are eligible for the safest equity release plans.
“How do I release equity from my home?”
One of the often asked questions for those ‘house rich, cash poor’ people is “How do I release equity from my home?”
It is not quite as complicated as you might think.
There are quite simple and straightforward steps you need to take if you are looking for equity release.
First and foremost, you need to find out whether you are likely to be eligible for the equity release plans. This can be done using our equity release eligibility calculator found here.
If you are eligible for equity release, it is important to find out what interest rates apply to you and how much equity you would be able to release. Not to worry, our calculator found above will help you on your way with this.
Now that you have all the facts and figures, you can then make an informed decision about whether to carry on with the process. A little professional help would certainly be of use to you now. Again the calculator will help you with this too.
If you decide to go ahead, the professional help you receive from Independent Financial Advisers will enable you to search the market to find the plan that is just right for you.
Then comes the house valuations, and finally the completion - with the help of solicitor’s of your choice.
Alternatively, call 0800 524 4853 for a personalised helping hand.
Lord Myners view on equity release
This news blog has written before on Baroness Hollis’ pro-active stance on the uptake of the equity release market - a real tool in retirement planning. Further to the discussion, Lord Myners - the Treasury Minister - has further backed Baroness Hollis’ approach. Lord Myners claims that for those whose position typifies ‘house-rich, cash-poor’, equity release may well be an integral part of the strategy they use to finance their retirement years.
Lord Myners also went on to congratulate the equity release industry’s stance on self-regulation, notably SHIP equity release, stating that they have “developed a highly commendable code of practice” and stated that the Government should encourage the use of well-regulated equity release schemes.
Market Trend: House prices continue to rise
Ever since February 2009, house prices in the UK have continued to rise. Many experts claim the demand for houses has far exceeded supply, leading to month-on-month growth - with August’s growth level said to be 1.6%. Nationwide claim there has been growth of 3.2% since the start of the year - with growth expected to continue long into the new year.
A property worth £300,000 at the start of the year would now be worth £309,600. If the current monthly trend continued one would expect that property to be worth £335,173 by December. Not only does this allow homeowners to release more equity from their property - it also opens up equity release as an option for those with larger mortgages that they would like to clear from their property - an ever increasing trend given that equity release requires no monthly repayments.