Switching Equity Release Plans
Possibilities of Switching Equity Release Plan
If you have already taken out an equity release and you’d still like to save and make more money, you can switch plans or release more equity. The interest rates have displayed some stability recently, as they make newer financial products available through time. It would help if you continued exploring the markets for better deals, which can save you more money.
Here's the deal:
For individuals that have already entered an active equity release plan, the common concern remains whether they can still switch from one release plan to another without a cumbersome process.
Equity release loans are no longer one-off transactions anymore. Thus, if you’re an older equity release customer, you must recognise the fact that you reserve the right to switch your current equity release plan if you find a more viable strategy for you.
Switching Your Equity Release Mortgages Effectively
You can and must switch to a more convenient equity release plan.
In case you might be wondering why...
You may come across a better equity release rate that makes it easy for you to operate and you can take advantage of more current interest rates which will give you access to a higher value of the equity accumulated in your property. You will also gain access to a broader variety of features from other plans.
Why You Need a Better Deal
Perhaps you have already signed and committed to an equity release plan. After some time, you may discover that the average rates for interest regarding equity release plans have declined over the years, and your current scheme becomes less competitive.
Now:
Switching your equity release plan might save you a good fortune. You may profit from changing your current plan to a more competitive one.
Taking Advantage of Modern Features
Different equity release plans provide you with different varieties of features, which you’ll select according to your circumstances and preferences to the best of your advantage. The features might include qualities like protection of your inheritance or security on downsizing, which may not be present in your current plan. If not, you can switch equity release plans to access some better benefits.
To add to that...
Also, you might be eligible to get an enhanced equity release plan, particularly if you have underlying health issues, and you need to access more finances at considerable rates.
Our equity release experts perform a search that encompasses the entire market, to ensure that they carefully put all components of your existing policy into consideration and find the most profitable deal for you.
Keep in mind:
Unless you proceed with the acquisition of the equity release plan, any services provided by the Equity Release Experts, like a consultation, are free. Whereby, the typical advice charge of 1.99% of the amount you release remains payable upon completion of the equity release plan.
Benefits of Switching Equity Release Plans
Your current equity release plan might get maximised and spawn the need to get an additional equity loan that might provide better lending plans.
Just think about it...
The alternative methods for enhanced lifetime mortgages can provide access to more considerable cash lump sums, considering the applicant historically has bad health. They offer a marvellous opportunity if you are a client that wants a complete release of your property’s equity.
Here's the deal:
Presently, the interest rates of equity release loans have become lower than they were some years ago. For instance, providers like the Portman Building Society and the Norwich Union have been initially collecting interest at rates exceeding 8%. You can imagine how getting an equity release of £500,000 with a compound interest rate of 8% per annum can grow exponentially.
Now...
Switch to a modern equity release plan, perhaps the current Aviva Flex Plan, which has interest rates at 5.8% per annum. You will save yourself well over £90,150 in a period just over five years—considering the cost of setting up for a modern plan for a lifetime mortgage. You can utilise a tool to contrast equity release plans and get an understanding of the bigger picture regarding your savings.
On the other hand...
Another significant change in the markets is that there is a great deal of new equity release providers today. Hence, this makes lenders on the market have much more flexibility than they had when underlining the terms of their loans.
To add to that...
Think about how the drawdown lifetime mortgage, a plan that may have only been around for about five years, has transformed the entire landscape of the industry, to the extent of influencing most loans taken today. The major attraction for these plans is that rather instead of you taking the entire cash lump sum upfront, you can withdraw it in smaller amounts whenever you need financial boosting.
It provides you with a lower primary balance that’ll only increase if you make further releases. The result is that you get charged interest at a considerably lower rate, which will drop your ratio, leaving much greater equity to remain in the property.
When to Switch Equity Release Plans
Switching to a different equity release plan isn’t just a matter of surfing the web and looking for equity release comparison sites, and applying for new loans. There are essential factors that you must consider before you determine whether a new loan will be profitable for you.
No wonder...
The equity release lending conditions may seem very lucrative when you browse through, but you must consider them with massive contrast to your present loan. A significant challenge that arises from switching equity release plans is the emergence of early repayment charges for you to make.
Here are some examples:
Aviva, also known as the Norwich Union, is the biggest equity release provider, and most people might think that they are the company to switch. However, suppose you consider how their early repayment charges get derived. In that case, the customers of Aviva usually find that it’s not easy to justify a re-mortgaging of the equity release plan they currently hold.
What does it mean for you?
The present fall-out rates bring heavy penalties for switching equity release plans now. Early repayment charges are the penalty fees that some brokers charge you to protect the lender from undergoing unnecessary losses, possibly made when you are making an early loan repayment.
The penalty fee might be a lump sum or just a portion of the full amount you’d borrowed. A company like Aviva will charge a maximum early repayment fee as high as 25% of the initial amount.
Now...
Before you decide about switching equity release plans, you must get a proper analysis of the terms and conditions surrounding the market and understand whether you can change plans without suffering.
Take Note
There were some older plans by the Norwich Union which did slap you with a potential 100% penalty fees initially, and you must remain aware.
Contemplate on this...
To effectively compare the equity release market, you must gain professional advice as you consider releasing the tax-free cash held in your home.