The equity release market has changed considerably since the beginning of the industry. Products have come and gone. For example, the Hodge Share Growth Option, a home reversion plan, is no longer available. Hodge Lifetime was a forerunner for all equity release schemes. The market is left with few companies offering the product. They include Bridgewater, Crown and New Life. Since home reversion payouts are dropping in these last few years; there has been a drop in tools available to consumers like you including home reversion calculators.
Impossible to Find – NO!
It is definitely harder to find home reversion calculators; however, it is not impossible. You just need to know where you can search for the tools to make certain you are on the proper website and not led astray. Doing a Google search will show you results of supposed websites providing these HR calculators; however, the actuality is they offer a lifetime mortgage calculator. These two types of calculators are very different in the results they offer, thus the need to find a true tool.
Instead of getting frustrated by the misleading results, you can visit Crown or www.homereversion.org. Crown Equity Release has an association with HomeReversion.org ensuring you find a proper calculator for your home reversion needs. By using this product on the aforementioned website, you can determine whether it is possible to gain enough tax free cash to help during your retirement.
Exploring the Differences in Products
Lifetime mortgages are loans available to retirees aged 55 or older. There are four types of lifetime mortgages, which are not currently relevant to the discussion. With a lifetime mortgage, you will need to pay the principle tax free sum plus any interest that has accrued at the end of the loan. The end of the loan is defined as your death or a move to a long term care facility. Lifetime mortgages can be transferred to new properties with some companies, not all but some, thus the definition of payment.
Home reversion is not a loan at all. There is no interest that applies to the concept. Instead, you allow partial control of your home to go to the buyer. You will sell your home, in full or part, in return for cash. It is tax free cash, to be used as you wish. The buyer signs a lifetime tenancy agreement with you allowing you to remain in the home until death or again until you wish to move. At the time you move or expire, your home is sold to the buyer in full. Any value or equity left in the home is given to your beneficiary or you.
The buyer then has full ownership of the home, which they can then sell to a new buyer. The new buyer will pay full value for the property, whereas you received only partial value based on the percentage you sold originally and at the end. An appreciation of your home allows for a higher percentage awarded to you.
Calculating Based on Value and Age
As you can guess, home value is going to apply to the amount of money you can obtain with home reversion. The more value a home has initially, the more you can get in a percentage. It is best to have an accurate value or as near an approximation as possible. Zoopla can help or Nationwide (if you have an old appraisal).
You must be 65 to take on home reversion. The older you are the more money you can receive. The premise is all about life expectancy for the company buying your home. They assume the older you are the quicker you will die. It sounds cold and it really is. They are in for the investment and potential money they can make, thus the less time you are in the home, the better, especially as the market improves. The more a home appreciates the more they can make on the resale.
Lifetime Mortgage Calculator
Results from a lifetime mortgage calculator are based on your age, home value, and the fact that there is an interest rate. You receive a specific percentage of the home sale just like home reversion, but you cannot determine what that percentage is.
With home reversion you can tell the home reversion calculators what percentage you want to sell of your home to see if it is going to result in enough cash to live during your retirement comfortably. An advantage is that you can always sell more of your home to gain more funds and still live in it.