Where can I find the Best Equity Release Calculator?
Best is often considered subjective, because what is best for you is not always best for someone else. When discussing the best equity release calculator, there are two ways to consider what “best” really means. The first is to describe what maximum release means as a means of explaining how it could apply as the best type of calculator. The second is the lowest interest rate.
The Products to Explore with a Calculator
Before discussion on calculators can happen, you need to know about equity release products. Home reversion is a type of equity release. You sell a part of your home or all of it. In return for the sale, you receive a lump sum of cash and a lifetime tenancy agreement. It allows you to stay in your home until your death without paying rent.
The other option is a lifetime mortgage. It is an actual loan with APR. The only difference between traditional mortgages and lifetime loans is the repayment. You do not repay the loan until after death or if you decide to leave and sell the house. The APR can be fixed or variable, which will determine the affordability of the loan.
Affordability versus Fun
Most of the time, you are seeking a calculator to see exactly how much you can take out in an equity release for a new car, to pay off another loan, to spend on the grand kids, or have a very special holiday. You might even consider taking out the maximum amount you possibly can to achieve a variety of goals, from house renovations to a new holiday home on the coast.
Yet, with lifetime mortgages it all boils down to one thing: over time as the APR is added to the loan can you still afford to pay it back? It is great if you can get the maximum amount now, but what if your home depreciates or is in a depreciated state when it needs to be sold to repay the lifetime mortgage? Taking out the maximum amount could become a problem, unless you have a no negative equity clause. Even with the clause the entire value of your home can become owed in the mortgage, which means no inheritance will be left for your family to enjoy.
This makes it important that you focus more on the actual interest rate. By attaining a low interest rate that is fixed, you can lower the amount of interest that compounds onto the loan over time. It makes the loan more affordable than trying to find the maximum amount you can gain in a loan that might take away inheritance you intend to leave.
Finding These Tools
Now that you understand the concept of best equity release calculator in terms of what makes it the best, it is imperative to understand you need to be accurate in your results. Before you speak with a broker you want to know if the option is affordable whether based on maximum amount or lowest interest rate. Therefore, you start searching for calculators finding products like home reversion calculator, independent comparison sites, and broker calculators.
A home reversion calculator cannot give you lifetime mortgage results and vice versa. So make certain you are looking at the proper tool before you start offering up information. Next, websites are not always updated, even when new products are added to a broker or comparison site. The tool might have an older interest rate or older maximum amount conversion. It is important to choose a website that has been updated recently this year.
If you choose a calculator, such as the one found at Pure Retirement, know the limitations. Most companies have information about their products and offer a calculator based on those products. Using a non-independent site can give you great results for that company, but may not be able to help you with other companies. Always check the accuracy of results by checking at least two calculators, as well as when the website was last updated.
As long as you always check, you can feel comfortable about the results. This does not mean the calculator is perfectly accurate. Your situation will determine the amount given to you by the lender. While age and home value are two factors determining the results, there are things that can change when you actually speak with a broker.
You might have an idea of your home value; however, only by undertaking an actual appraisal by the lending company will you be able to determine from the best equity release calculator what a potential lifetime mortgage amount can be.