Possible equity release products on the market include lifetime mortgages such as the enhanced equity release. This type of equity release is also known as an impaired or ill health lifetime mortgage. The name implies the person obtaining the loan has some sort of illness. It is the illness that can increase the maximum lump sum given by a company over that of the standard lump sum equity release. To determine if you qualify, you can use an equity release calculator. There are impaired equity release calculator tools available at independent websites, helping you find the answers you need. Prior to using this calculator you may also want to find a health and lifestyle questionnaire.
Health and Lifestyle Questionnaire
To qualify for an enhanced lifetime mortgage you need to fill out the questionnaire. It asks you a series of questions regarding possible ailments you may have. The depth of questioning will vary between equity release lenders, but on the whole, they are quite similar. An equity release calculator for enhanced equity release products is going to assume the worst case scenario about your health, which can give you a larger maximum lump sum than the actual lender may be willing to offer based on your current health conditions. It is for this reason you will need to speak with an independent broker and fill out the forms based on their suggestions of companies that might help you receive the maximum lump sum possible.
Partnership Equity Release
Partnership is one company offering an impaired equity release product. The information in this section gives you an example of some of the questions they ask with regards to their ill health lifetime mortgage.
• Your weight: in stones and pounds is required
• Your height: in feet and inches
• Have you used manufactured cigarettes, smoked 10 cigarettes or more per day in the last 10 years?
• Did you smoke rolling tobacco, if so did you smoke more than 3ozs or 85 grams per week for the last 10 years?
• Do you have a diagnosis of high blood pressure that requires ongoing medication?
• Were you hospitalised for a heart attack?
• Do you have diabetes which requires insulin or tablet treatment?
• Have you suffered from a stroke, excluding mini-strokes?
• Do you suffer from angina, where ongoing medication is needed?
• Do you have any type of cancer excluding skin cancer or benign tumours, which require surgery, radiotherapy or chemotherapy?
• Have you been diagnosed with Parkinson’s disease or multiple sclerosis?
• Are you in early retirement due to grounds of ill health?
• Are you on prescription medications for any ailment?
As you can see from the questions above many are simple yes or no answers. When you fill out this questionnaire, you need to be answering these questions for the youngest equity release applicant. Only the youngest applicant (homeowner) is able to use ill health to obtain a lifetime mortgage. In fact, for any lifetime mortgage, the youngest applicant has to be used in the equity release calculator to get proper and accurate results.
The calculator will take the results from the questionnaire you filled out and provide you with the results based on any question you answer with a yes. If there are no questions that have a yes, you will be told you do not qualify. As long as you qualify the results will be shown.
Interpreting the Results
The results are based on more than just your ill health, if you have any issues. The results will also be based on your age and property value. The youngest person must be at least 55 years of age. The older the person the more money released on the thought it will be returned quicker. This is the same premise as an enhanced equity release. Your ill health could shorten your life expectancy. Given this situation you can gain more funds from the lender.
The property value determines how much equity is actually available in the home. This determines the loan to value percentage in terms of an actual amount. If you are aged 65 and in good health, you may get up to 30% of the property value in the loan. A person with ill health could get a higher maximum. Using an equity release calculator determines how much higher the maximum lump sum might be. After gaining the results you can then go on to speak with an adviser to double check the results.