Two factors go into how accurate an equity release mortgage calculator is going to be. The first is whether or not the website with the calculator is up to date. Does the website offer information regarding the most current products available from the various equity release companies? Is the calculator able to use an age range of 55 to 90? If you can find the last updated details and the equity release calculator works for the entire age range products are available for, then you can be certain the website will provide accurate information. The second factor is you.
What you Give the Calculator
Like the mortgage calculator has to provide up to date loan to value percentage information based on an appropriate age range, you must provide accurate information based on your age and home value. A failure to input proper data is going to skew the results. You might be elated that you can get the amount you want for the loan, until you find out you used the wrong information or type of calculator and now you are not going to get even half the maximum amount you need.
The information you put into the calculator will need to be the age of the youngest homeowner. This is the homeowner on the property title. If a person is not mentioned on the property title or will not be made a part of the lifetime mortgage loan then they cannot be counted as a homeowner. If you are the person using the equity release mortgage calculator, but you are not the youngest homeowner, then you have to use the other person’s age.
• If you use your age, the results will be accurate, but not attainable.
Deciding on the Value of Your Property
Property value is the second piece of information you need to input accurately into the calculator. This is often the harder part for many homeowners because they have had their home for years. The last appraisal could have been 30 years ago. As you need the current value in the market today, you have options. There are at least three places to get values and one of those is nethouseprices.com.
This website shows information regarding housing sales, when these sales occurred, and allows you to search based on like homes. You want comps that are comparable to your home. Something that is much smaller, has fewer bedrooms, or is double the size of your home is not going to provide an accurate value of your property. Once you gauge a new likeness to your property you can use that value in the calculator.
Understanding the Answer
By now you understand that the answer you receive is dependent on providing information that is as accurate as possible and even then the results will only be as accurate as that information. If there is anything wrong with the website equity release calculator you used or in the property value assumption you made the results can be skewed. For this very reason you should make certain to use the estimate received as a guide and not the holy grail of what is actually going to be awarded.
Types of Calculators Provided Online
Even if you use an independent website that accounts for all the products on the market, there are differences in actual products. Some calculators can use the same page while providing you a choice of loan type or home reversion. Most of the time you have to go to a completely separate calculator in order to get the results you want to compare based on the different products in the market.
For example, home reversion is a home sale with no repayment since it is not a loan. You can play around with the amount of home you want to sell to determine the actual amount you get in tax free sum.
With lifetime mortgages you are taking out a loan that has interest to be repaid along with the principle sum. The repayment does not happen till death, but you still need to be aware of the difference from home reversion.
Lifetime mortgage companies look at the property value, how long you might live, and then determine a percentage of equity to be released based on the potential term of repayment and interest accrual. If you use an equity release mortgage calculator for ill health the maximum amount will be significantly higher than a standard equity release, which can further estimate different results and require a broker to check the information you received.
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