When you reach the end of your working life, your money dinamics change drastically. Your salary is replaced by retirement, and you can no longer influence how much you get. There aren’t such things as “retirement promotion” or “I will change my retirement because I found a better option that pays more”, just like there was when you were working. Since retirement means a fix income, you should make sure you have as much as you need or want. You shouldn’t find yourself limited in what you want to do in your life, how much you want to give to others, or in which new adventures you would like to embark. That is the whole point of retirement planning.
It is known for a fact that young people aren’t very inclined to think about their retirement and plan so much ahead in time, but the thing is, the sooner you get around your retirement planning, the more you can benefit from early decisions and plans. You should get an advisor to calculate your income for retirement based on your current situation, projections and possibilities for investments. Retirement planning is a lot about long term prospects, so there is quite a high chance that you will come across unexpected situations in your life that allow you to have even more money than projected when you retire… or sometimes the complete opposite.
So having one or two contingency plans isn’t a bad idea at all, and the closer and closer you get to your retirement day, the easier will be for you to know what you will have then and what possibilities you will be able to enjoy. Even so, there are options for you to boost your retirement, clear out debts and get more money for a wide number of purposes, even without much previous planning needed. Equity release deals fall into this category.
Just as with any other loan scheme, equity release will be good for you or not, depending on your situation and your needs. Overall, people have benefitted greatly from reverse mortgages, because they can access extra income or a lump sum without the need to change anything at all about their lifestyle and without resigning anything at all for as long as they live. The possitive aspects of equity release in many cases outweigh what you have to give up.
There are, yes, many things to know about how these schemes work. There isn’t only one way in which you can access the equity of your home, and each scheme has its pros and cons, so it is important that you choose wisely among all those options. You should do some research so you can find out what options you are, what are the costs associated with closing a deal, how much equity you will actually get – which will never be the 100% of your home’s value – and what are the terms you have the right to request when soliciting a deal.
Hiring a mortgage advisor or financial advisor is almost a must in these situations, because of the clear insight and useful information they can provide. However, it isn’t a bad idea at all to do some reading first, so you can get a picture on how equity release deals work. Here is a useful link: Frequently Asked Questions on Equity Release.
A reverse mortgage calculator – or equity release calculator – is a very useful tool for those who are interested in applying for an equity release deal. Some reverse mortgage providers will allow you to use their equity release calculator for free, and offer an online gadget for you on their website. There are organizations and even governmetn offices that also provide an equity release calculator. These tools are often free of charge and also free of compromise.
With an equity release calculator, you get the aproximate amount of money you would get from a reverse mortgage by introducing some basic information. This should include the value of your home, standing debt, your age, and sometimes your interest rate.
It is important for you to know that mortgage calculators only offer an estimate on how much money you could get. No company is obligated to provide such rates just because the calculator displayed them. The final deal is designed on a case by case scenario, so the results of an equity release calculator are merely orientative. You should shop around and ask for free quotations to more than one lender, because there is the chance you would actually get more or less money than that.