Charlie and the Chocolate Factory is one of the most popular musical shows and being the musical theatre enthusiast you are; you want to organize an event based on the show. Nonetheless, you have no adequate funds to help you bring the show alive, and now you’re looking for investors. After having a couple of meetings, no one seems to be interested in investing in your event. You try amassing your pension pot, investments and other savings but they’re not enough to cater to the vent. Well, lucky for you, you can use the equity loan calculator to figure out how much capital you’re eligible for and make your vision come true.
Equity Loan Calculator Explained
What is the equity loan calculator, and how will it be the knight on a white charger you’ve been looking for you ask? Well, the calculator is a tool of the equity release financial product. The equity release plan is a mortgage plan that enables you to unlock the value tied up in your estate. Unlike traditional mortgages1, equity release schemes allow you to continue residing in your own home until you pass on or move into residential care. Only then does the plan provider put up your home for sale. They then take the loan amount (plus interests accrued) and the remaining proceeds divided amongst your heirs.
If you’re over 55 years plus and a property owner in the UK, you almost certainly qualify for an equity release2product. The scheme is tax-free, and you may spend it on whatsoever you want. Therefore, you can go on that vacation to the Himalayas or Mt. Kilimanjaro, make home gentrification projects, clear your debts and outstanding mortgage, pay for the expenses of the musical theatre show and enjoy your golden years.
It features two options, the lifetime mortgage plan and the home reversion scheme. The lifetime mortgage allows you to release the equity tied up in your home, and you pay the loan when you die or move out permanently. The scheme also involves paying interests – meaning when the loan policy ends, you’ll pay back the loan amount plus the interest rates accrued.
The home reversion plan, on the other hand, involves selling apart or all of your home to the plan provider. So, when you die, the lender will put up the house for sale. The equity company will then take their share of ownership, and the remaining proceeds will go to your beneficiaries. Also, you don’t pay any interests, unlike the lifetime mortgage scheme.
Another difference the scheme has from the traditional mortgages is that it offers you with the benefit of having the no negative equity guarantee3 agreement throughout your policy. Therefore, when choosing the best plan for your situation, make sure that you select one that’s regulated by the Financial Authority4 (FCA). The guarantee ensures that all equity release schemes adhere to the SHIP’s regulations. It safeguards you from having the amount you owe driven up by estate price changes. So, your beneficiaries can’t ever incur any debt over the property market value once you pass away.
The typical equity release rates are between 2.5% to 7%, making it significantly higher than most unconventional mortgages. What you have to pay back is higher if you’re not reducing the b=debt. Thus, the interest keeps building up with time. However, you can always choose to take the voluntary repayment scheme or interest-only mortgage to reduce the interest accrued. So, make sure that you take out the equity release plan now and have the most memorable show in the UK today!