If you are considering equity release (the process of releasing some of the equity held in your property) there are a number of questions you will be likely to want to ask to begin with. It makes good sense to ensure you have all the facts available before you decide whether to make an application for a lifetime mortgage. An equity release calculator can help you get the essential answers you will require.
What is an equity release calculator?
It is not a calculator in the normal and basic sense of the word. However it does help you work out how much money you can potentially release from your property.
As such it is an important tool to have because no two individuals will be in the same situation. For instance, let’s say we have two applicants to consider. The first is aged 55, the youngest age at which you can be considered for equity release. This person has a property worth £150,000 and owes £10,000 on it. The second person is aged 67 and owns a property worth £300,000 that is completely mortgage-free.
We can see from these two examples that the only thing the two potential clients have in common is the fact they want to release equity from their properties. In each case their ages, the property value and the amount of equity available in it will determine the amount they can actually release from the property itself.
You’ll be able to reveal the maximum amount you can release
One of the key features and benefits of an equity release calculator is that it enables you to work out the amount of money you could release. Remember, you don’t have to take the maximum amount available. However it does mean you know what the possibilities are and thus you can plan ahead and consider how much money you need. This may depend on what your plans are for the cash.
Most calculators may also give you the ability to account for a sum of money you wish to set aside to provide your offspring or other relatives with an inheritance. Make sure you consider this element carefully as you use a calculator of this type.
Are you obligated to use equity release if you use a calculator like this?
No – it is much like any other useful calculator you can find online. It merely gives you the tools to crunch some numbers and to work out whether this might be an option for you to consider. Most equity release companies will have a calculator similar to this for you to use. It may be worth trying a few of them on different websites so you can see where you stand with different companies.
As you can see, this type of calculator is a good tool to start with if you are currently considering equity release for any reason. Knowing exactly where you stand financially is the most important thing of all.