What is an Equity Release Calculator?
Can Online Tools Show Whether Equity Release Schemes are Worth it?
Once individuals reach a certain age (usually 50+) they may become aware of equity release schemes. These products could allow them to release cash from their properties without selling up. This can be useful later in life when pensions may not be delivering enough cash for their needs/plans. What part does an equity release calculator play in the process?
What Can Equity Release Calculators do?
Knowing that they may qualify for equity release approval on paper may be easy for an individual to assess. Knowing what this means in real financial terms may be harder to work out. If this kind of solution may be a viable option then the individual may well need to know what they could get out of it before they start looking at specific products.
An equity release calculator may be able to help with this. These online tools ask a few questions and can then give projections on how much cash may be made available. In some cases, they may show the different options (i.e. how much might be available with each product type). This will depend on the calculator and on the products offered by the company that provides it.
What Information Must be Entered Into an Equity Release Calculator?
Again, this may vary from tool to tool. At a basic level the individual will need to enter:
- The value of their home
- Their age
This core information is needed to make the estimates here. Some companies will only deal with homes that are worth over a certain amount. Plus, the sum that may be given is also based on age. Generally, the older the individual is, the more they may be offered.
It may be wise to avoid calculators that are simply there to grab people as sales leads. Most reputable companies and sites will have an estimating tool that can be used for information purposes. Some, however, will want the individual to enter contact details to be called back with their projected release sum. This may not be necessary at this stage.
Things to Think About Before Opting for Equity Release
Taking this step should be done with due care and consideration. Whilst an equity release calculator can be a useful way of working out how much may be made available, consumers may also want to think hard about the pros and cons of this kind of solution before taking it out.
Finally, the Financial Services Authority (FSA) has an online brochure on equity release that may be useful in the decision making process.
Related Articles:
- Releasing Equity: How Can Safe Home Income Plans (SHIP) Help?
- Pensioners Using Equity Release as a Source of Cash in Retirement
Source: www.fsa.gov.uk
© 2009 Carol Finch
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