If you need some extra funds and you’re thinking about releasing equity, read on. We’ll tell you how much equity you could potentially end up with thanks to this fantastic Equity Remaining Calculator.
Before we get into the calculations, we should probably cover the basics first. So, what is equity?
Equity Release In A Nutshell
Equity release refers to your property’s items/parts that let you access your money tied up in your house. However, you can only gain access once you’re 55 years or older. You can get the capital value of objects in your home as a lump sum or an income based on the house’s value. You’ll just need to repay that money you accessed at a later stage. There are two types:
The first type of equity release is a lifetime mortgage. This type lets you take out a mortgage on your home if it’s your primary residence. However, you will remain the owner. You’ll have the option to ringfence part of your property for your family to inherit. You can also make repayments or let the interest increase. Better yet, if there’s any loan amount or any accrued interest, it’ll be paid back when you pass away or need long-term medical care.
The second type is a home reversion, which means you sell some of your property or your whole property. You can sell it to someone like a home reversion provider, and they’ll pay you a lump sum for it, but they can also pay you in regular payments. It’s your choice.
You might be asking yourself this:
Is Equity Release & The Whole Process, For You?
Well, ask yourself this: Have you been struggling to meet your lifestyle needs, or you need some extra finances to cater to your lifelong dreams? Are you a UK resident, over 55 years, and own a homeowner worth more than £70,000?
If yes, rush over to your financial adviser and start making plans towards taking out an equity release plan. Equity release allows homeowners to achieve their future financial desires by unlocking the equity tied up in their property.
So, let me tell you something:
Suppose you’ve been told you’re ill and you don’t have much longer to live. If you’re wondering about the equity release plan, you took out six years ago and how much your children will inherit, listen to this.
You don’t have to be anxious about the current recession, about the future wellbeing of your grandkids. Say you’ve made some early repayments to your equity loan with the hopes of increasing your inheritance for your heirs. It’s going to help you a lot to use this equity remaining calculator so you can determine what amount will stay when you pass away.
Most people want to plan. So, you probably want to know how you’re your children will inherit once you die, so that you can try to increase that inheritance while you still can.
How to Calculate Remaining Equity
In order to calculate the remaining equity on a loan, you will need two numbers. The first number can be found in your monthly mortgage statement and is called “balance”. This balance is what you owe on your total loan amount.
I can explain
For example, if you have $200,000 left to pay off of an original $400,000 total debt then your balance would be 200k
The second calculation needed for this type of calculator requires that we know how much interest was paid during those months as well as the principal payment made each month. You should go ahead and just guess at these values because they are not important in determining the equity due to rounding errors caused by calculators having limited precision when displaying decimal places.
How Do I Calculate The Equity In My Home?
It’s possible to calculate the equity in your home. Simply:
- Find out your property’s market value at present. Please note that the money you spent on it isn’t its value.
- Subtract your property mortgage balance. Subtract what you owe plus interest from the property’s current market value. This will give you estimated pre-existing home equity.
- After all that, you can know how much money you’ll end up with.
Can I Calculate My Remaining Equity?
Yes, you can. You can calculate the amount you’ll get when your provider sells your property, minus the interest accrued. The remaining money goes to your family or heirs. So thanks to this calculator, you’ll be able to plan and make the best financial choices until you die.
How Do I Use The Equity Remaining Calculator?
Because your equity mortgage will significantly impact your family’s inheritance and your estate’s value, you can use the calculator to help prevent that inheritance from decreasing dramatically.
Bear in mind that your estate can be impacted. If your estate is valued very high after repayment, then your inheritance will be more significant. Even though market prices will continue rising and falling throughout your loan period, they’ll end up being slightly higher in the long run.
According to the Nationwide House Price Index, the average property price has risen by roughly 345% in the last 30 years.
So, how much could your family inherit?
Can The Equity Remaining Calculator Tell Me How Much Inheritance My Family Will Get?
The simple answer is yes. You can calculate that amount. However, you need to remember that that amount can change, depending on your regularity and quantity of repayment.
So, to calculate your inheritance amount that your family or heirs will receive when you pass away, and your equity release plan is repaid, use this equity remaining calculator. The equity remaining calculator works based on a roll-up lifetime mortgage if no repayments are made. In other words, the interest compounds annually.
This calculator is straightforward to use. You can also alter the results based on differing circumstances you think might happen in the future. For example, the amount you want to borrow, the interest rate on the equity release plan and how much you estimate your property will increase in value, as an annual percentage (or the House Price Index/HPI). After calculating what you need, the results will display immediately. Easy as that!
Equity release is such a great option if you want money and you want it fast. It’s a way to provide for instant needs at low interest rates. But you don’t always know how much you’ll be able to have left for your children to inherit. And that can be off-putting. But no need to worry! The equity remaining calculator is there to sort out that problem for you.
Now you can work out how much money you’ll leave for your heirs. If that amount is alarming to you, you can still make some changes and more repayments to increase that inheritance should you want to.