Are you retired and you have specific health issues that are worrying you? Do you own a home that’s worth over £70,000 in the UK? Well, then you’re eligible to take out a Lifetime Mortgage plan as a form of borrowing money for your health issues. Read on to see how you can calculate your enhanced lifetime mortgage amount.
Now, before we look into this fantastic calculator, let’s dive into enhanced lifetime mortgages.
Enhanced Lifetime Mortgage Plans Explained
An enhanced lifetime mortgage plan, also known as an impaired lifetime mortgage plan, gives you a reasonable amount of money or low interest rates compared to the standard lifetime mortgage plans that are out there.
This mortgage plan is a lifetime mortgage option that will offer you capital. This capital or equity is tied up, as a manner of speaking, in your home. It’s specifically created for people over the age of 55 that own a home.
A Complete Guide to Enhanced Lifetime Mortgages
Enhanced lifetime mortgages, also known as “ELMs,” have become more popular in recent years with the uptick of seniors living on fixed incomes and struggling to make ends meet. Enhanced lifetime mortgage loans allow you or your loved one to borrow against their home’s equity without penalty in order to supplement retirement income. Let’s take a closer look at how ELMS works.
How Does Enhanced Lifetime Mortgages Work?
An ELM is a mortgage loan that allows borrowers to use all or part of the equity in their home as collateral for a fixed-rate, 30-year term, with payments being made on an interest-only basis. The difference between this and other mortgages is what happens when you finally pay off your principal balance.
With an enhanced lifetime mortgage, instead of paying out the remaining amount owed to clear up the debt (as would be done with any traditional loan), just enough funds are paid each month so that if/when the value of your home appreciates over time, it will offset some or all of these future payments. If appreciation doesn’t materialize – then we’re back at square one: making monthly mortgage payments until they’ve been cleared.
Benefits of Enhanced Lifetime Mortgages
It’s a good option for people who want to pass on their home when they die, but don’t have anyone (or not enough) to inherit the property
If you are struggling with debt and may need to sell in order to pay your bills, this might be a better choice because it can increase the time that is available before someone needs access or ownership of the house due to its principal balance being deferred until later than usual.
To Learn More: Breakdown Of Enhanced Lifetime Mortgages
Let’s come to the Enhanced Lifetime Mortgage Calculator…
The Enhanced Lifetime Mortgage Calculator
So, you’re seriously considering taking out this mortgage. Well, to give you that final nudge, we’ll tell you how much you can loan from your provider.
How To Use The Enhanced Lifetime Mortgage Calculator
To use the calculator, enter information about your house and mortgage loan: the purchase price of the home, the interest rate on the mortgage (including any points), and how much you want to borrow.
The tool will show a series of monthly payments starting with an initial payment for principal plus accrued interest followed by regular amortizing payments that include both principal and interest.
What’s An Enhanced Lifetime Mortgage Calculator?
An enhanced lifetime mortgage plan, also known as an impaired lifetime mortgage plan, gives you a reasonable amount of money or very low interest rates compared to the standard lifetime mortgage plans that are out there. This mortgage plan is a lifetime mortgage option which will offer you capital. This capital or equity is tied up, as a manner of speaking, in your home. It’s specifically created for people over the age of 55 that own a home.
There are some prerequisites to taking out such a lifetime mortgage plan. The property that you want to release equity from needs to be within the UK. Your property needs to be valued at £70,000 minimum.
Therefore, this calculator is to calculate how much you can release from your property as an ill person. It considers the value of your home, as well as your age and health history.
How Can I Calculate My Enhanced Lifetime Mortgage Amount?
Firstly, input the value of your home or property you want to release equity from. Secondly, input your age, name and contact details. That’s it! This calculation will give you a rough estimate of the amount you’ll be able to borrow or release from your home.
You’ll need to fill in the health questionnaire as mentioned above to calculate any further interest reductions and calculate added benefits if you qualify for the illness lifetime mortgage plan.
How Does The Enhanced Lifetime Mortgage Calculator Work?
It looks at the value of your home and your age to calculate how much money you’ll be able to release from it and how much you’ll pay it back as well.
Is the Enhanced Lifetime Mortgage Calculator Accurate?
The calculator is accurate to a certain point. It gives an estimation because it can’t foresee any changes in the future. For instance, say you’ll be making more repayments in the future, then the amount will vary. The calculator also doesn’t know about which provider you choose, and all providers differ. Another aspect is that each provider will ask you to fill in a health history questionnaire, which might also change the loan amount. Therefore, just keep it in mind as an estimate.
We understand that if you are retired or you are looking out for your health then an Enhanced Lifetime Mortgage will be of great use to you. Releasing equity from your home is such a great way to get some extra cash! Better yet, ironically, you’ll be able to get more money out when you’re ill or suffer from health issues. You’ll also be charged less interest than healthy people.
We hope that after reading this you will have a greater understanding of how it the enhanced lifetime mortgage is calculated and what criteria is used to qualify someone for it. If you are a suitable candidate for this plan then we advise you to speak with our specialist. If you have any further questions, feel free to ask us any time!