Equity release is a fantastic financial solution for a great many retired people. Eligibility for equity release is restricted to home owners aged over fifty five and it is designed to allow home owners the ability to release equity tied up in their home. There are a number of factors which influence the amount of equity release available including the age and gender of the applicant. However, for those suffering from a terminal or serious medical condition, there is a possibility to release a greater percentage of equity with an enhanced equity release scheme.
What is an Enhanced Equity Release Scheme
Standard equity release schemes use a number of factors to determine your potential lifespan and therefore the potential duration of the scheme. Since equity release is a lifetime plan, it is important for the provider to be able to estimate how long the scheme will run for. This will determine whether there is sufficient equity to release a lump sum and cover the interest which will be compounded on to the balance over a number of years. A standard equity release scheme will use criteria including age, gender and marital status to estimate your lifespan based on national average trends.
However, if you have an illness or medical condition, you may qualify for an enhanced equity release scheme. These plans have been designed to allow a greater percentage of equity to be released based on the lifespan of the applicant being impaired by their medical condition. Generally, with an enhanced equity release scheme, someone with a serious or terminal medical condition could release a far greater percentage of equity when compared with someone of the same age and the same qualification criteria who is in good overall health.
What Conditions are Considered with an Enhanced Equity Release Scheme?
In order to obtain qualification for an enhanced equity release scheme, the applicant needs to prove that they are suffering from some form of life threatening medical condition or lifestyle which would compromise their lifespan, in addition to their age. Medical conditions which would typically be considered include:
• Cancer
• High blood pressure
• Diabetes
• Parkinson’s disease
• Multiple sclerosis
• Heart disease
There are also several lifestyle habits which may influence qualification for this type of scheme including smoking.
How Do Enhanced Circumstances Affect the Equity Release Scheme?
Once it has been established that you meet the medical or lifestyle criteria for an enhanced equity release scheme, your lender would approve your application for an enhanced scheme. This would allow you to release the maximum percentage of equity as described by your specific plan. Typically, enhanced plan offer applicants the opportunity to release up to fifteen percent more equity when compared to a standard scheme.
This can be important for those looking to release the maximum lump sum possible. The lender will assess your age and the severity of your medical condition or health history to determine exactly how much you would qualify for. There are also a number of equity release calculators which have been pre programmed with the qualification criteria for a number of enhanced plans. The more severe your condition, the greater the amount of release would be possible. However, the condition must be something which would compromise your life expectancy in order to qualify.
The exact amounts available will depend greatly on the specific scheme. Some of the popular and established lenders for equity release, such as More2life and Aviva offer enhanced schemes. This can enable people with deteriorating health to enjoy a holiday of a lifetime, improve their lifestyle, plan for care or even assist their family before their health is fully compromised. The schemes can be tailored to suit your specific requirements and circumstances which offers the possibility for the best suited plan for your needs.
If you are interested in equity release and are suffering from a serious medical condition, an enhanced equity release scheme may represent the best option for your circumstances. There are a number of plans available which have different qualification criteria. It is worth researching an enhanced calculator tool to provide examples of the maximum amounts of release possible. Alternatively, speak to your equity release adviser about whether you would qualify for an enhanced scheme and whether it would be the best option for you. They will be able to help you assess the advantages and limitations of the specific plans in order to ensure that you choose a scheme which is best suited to your needs.