Home reversion used to be the most sought after product on the market. This has changed in the last decade, making lifetime mortgages more popular. They became more innovative in design and flexibility, plus the former Financial Services Authority (now Financial Conduct Authority) started regulating the retirement mortgage industry more. It meant several companies needed to take their home reversion products off the market. Despite fewer products on the market, there are still home reversion equity release schemes and advice available to help you determine which product is right for your situation. Particularly as you search for free equity release calculator tools, you will notice using a home reversion calculator will come in handy for comparison.
Searching the Net for Calculators
Websites like www.homereversion.org are available to help you find guidance and calculator tools for how home reversion schemes work and what they can offer monetarily. This website is just one that provides a unique calculator that helps you estimate the tax free lump sum you can obtain in exchange for a fixed percentage of your home value. The home reversion calculator is free to use and a brilliant concept.
You can also go to Google and type in the key phrase to search for home reversion tools and equity release companies. Of course, most of the results will not provide you with a home reversion tool. They are just advertising the tool to get you into their site. Most of these results provide only the lifetime mortgage calculator, which does not offer you the proper estimation of tax free lump sum amounts. The advertising is definitely misleading. Yet they still pretend because they want to get your business for lifetime mortgages.
Rather than fall into the trap of a straight search, you can visit a site like HomeReversion.org. You obtain accurate and informative details regarding this type of equity release plan. Crown Equity Release is another website that is associated with HomeReversion.org. They provide a calculator, too.
The Difference in Calculators
You are probably wondering why it matters if a calculator is a home reversion calculator or not. Unfortunately, the financial industry is a bit complicated. There are different criteria used for home reversion estimations than in lifetime mortgage calculations. This means the results of the tax free lump sum will vary. It can be significant thus affecting the true ability you have to gain funds.
You definitely want to use the calculator designed for the product you are currently researching. Remember, home reversion is a sale of all or part of the place you own. It is not a loan like lifetime mortgages. There is no interest to calculate, which means the result from the HR calculator is a percentage of home value you can take out and not an estimation of maximum amount, plus an indication of total expense for the loan and interest.
Age is another factor. Age is used in the calculation like the value of your home will be. Home reversion will only be offered to individuals aged 65 years or older. Lifetime mortgages can be supplied to those over 55.
How Home Value and Age Apply
Companies are in business to make money. They look for the best advantage to their company for making that money. Home reversion has no repayment, instead the company has to wait until you die or decide to move out of the house to recoup their investment. The longer you are in the house, the more the housing market can change. A company can win or lose based on appreciation or depreciation of your home; therefore, the calculator examines your age and applies it to mortality tables indicating the potential life span you have left in you.
The more years left, the longer it takes to recoup the investment, thus the lower the percentage of home value you will receive in a home reversion scheme. The shorter your life expectancy the more you can obtain in tax free money.
Housing value also matters. Equity is based on the value. Equity is the total value of your home minus any money owed on it. With home reversion you own the house in full or at least you will need to before the process can be undertaken, i.e. the money from the home reversion could pay off the mortgage. Basically the home reversion calculator will show you if you want 30% of your home what the home value plus your age will net you. It can also show what age you need to be to increase that 30% if you have a figure in mind of money you want to have after the sale. Most people do.
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