The Possibility of Switching Equity Release Plan?
Interest rates have shown some stability lately as new financial products
are becoming available all the time. Therefore, it is right for you to keep
exploring the market for more profitable, better deals which could save you
money.
For people that are already engaged in an equity release plan, their most
common concern remains whether they can switch from one scheme to another
with ease.
Equity release mortgage is no longer a one-off transaction anymore, and
older equity release customers must realise the fact that they can switch
their current equity release scheme to a more competitive plan.
Thinking of Switching Equity Release Mortgages?
Switch to a more competitive equity release plan. You might find a better
rate to operate with by taking advantage of the latest interest rates
and getting access to more equity valued in your home.
You will do it to unlock more features and access more features from other
plans.
Why I Want a Better Deal?
Suppose you already committed to an equity release plan. In that case, you
might find that that the
average interest rates
for equity release plans dropped over the years, and your current status
becomes less competitive.
You can benefit from swapping your current plan to a more competitive one.
Switching equity release plans can save you thousands.
Taking Advantage of the Newest Features
Various equity release schemes provide you with a variety of features that you may select according
to your preference or wish to use to your take advantage. These may include
features like inheritance protection or downsizing protection, and perhaps
they might not be features in your current plan.
If so, you may switch plans to unlock the additional benefits. You may also
be eligible to get an enhanced program, perhaps due to underlying health
conditions and need to access more cash at reasonable rates.
Your equity release experts are the providers of your advice, and your adviser searches the
entire market, ensuring that they put all elements of your existing policy
into consideration to find the most profitable deal for you.
Keep in mind that, unless
you go ahead with the acquisition, the service provided by The Equity
Release Experts is entirely free, and the typical advice fee of 1.99% of the
total amount you release. Payable upon completion of the plan.
The Benefits of Switching Equity Release Plans
Your existing equity release plan can get maximised and cause the need for
an additional loan that may offer better lending facilities. The alternative
methods for enhanced lifetime mortgages, which can provide more
enormous lump sums regarding poor health and lifestyle, can be the ideal
opportunity if you are clients that want the full release of your
equity.
Today, the rates of interest of equity release schemes as you
borrow are lower than they were years ago.
For example, the likes of Norwich Union and Portman Building Society have
been getting interest rates exceeding 8% initially. Thus you can imagine how
getting a massive equity release of £500,000 with a compound at 8% per annum
can grow exponentially.
By switching to a new equity release scheme, perhaps the new Aviva Flex Plan
is at 5.8% per annum, you can save yourself over £90,150 just over five
years. You are taking into account the costs of set-up for a modern plan for
a lifetime mortgage.
You can use a tool to compare equity release plans and get the bigger
picture of your savings.
One other significant change in the market is that there is a good deal of
new equity release mortgages today. Thus, lenders have become much more
flexible with their terms on loans than they were before.
Ponder upon how the drawdown lifetime mortgage schemes that might have only
been around for about five years have transformed the landscape of the
industry, to the extent of influencing a majority of loans taken today.
The main giveaway for these schemes is that rather than you taking the total
lump sum upfront, you can get smaller withdrawals whenever you need some
cash to inject. They provide you with lower initial balances that only grow
when you make further releases, as a result in you getting charged interest
considerably less, which will lower your ratio with much greater equity
remaining within the property.
How You Will Know Whether to Switch Plans
Making the switch to an alternative equity release plan isn’t just a matter
of browsing the internet looking for equity release comparison sites and
applying for new loans. There are essential factors that you will need to weigh for you to determine whether a new loan
will be viable for you.
The conditions of lending might seem very lucrative as you browse, but you
need to consider them with contrast to your existing loan. One of the
significant challenges of switching plans can emerge from early repayment
charges made.
Aviva, which is also the Norwich Union, is the largest equity release
company, and for most people, they might seem like the company to switch.
However, considering how their early repayment penalties get structure,
customers of Aviva might find it difficult to justify a re-mortgage of the
equity release scheme they currently hold. The current fall rates have
brought heavy penalties for swapping plans now.
The early repayment charges are penalties that some brokers will charge you
that protect the lender from undergoing losses made because you are making
an early loan repayment. The penalty can be in the form of a lump sum or
just a percentage of the entire amount you borrowed.
A company like Aviva has maximum penalty fees as high as 25% of the principal amount.
Note that some older plans
by the Norwich Union plans did initially slap you with potential 100%
penalty fees, so remain aware. Before you make the correct decision about
switching plans, you must get proper analysis on whether to change
plans.
Contemplate
As you compare the entire equity release market, you must get professional advice before you release any tax-free cash from your home.
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