Equity Release Advice
Equity Release Advice: All You Need To Know
Where to Find an Equity Release Adviser
Think about this for a moment:
While it’s possible to find an equity release adviser on your own, we recommend you go through a reputable financial institution.
They can be found in many different places and are able to help with not only the finances of completing an equity release plan,
But will also offer advice about what type of house or property would work best for your situation.
You can find them online, in newspapers or magazines, on television and radio as well.
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5 Reasons You Should Seek Equity Release Advice
There’s a Huge Variety of Products Available
There are many different types of equity release products available and the costs vary greatly.
You can find a pensioner who wants to use their property as collateral but may not have enough money left over for retirement living expenses,
Or you could be someone like a widow whose children live abroad and don’t want her to leave their home behind when she passes away.
Depending on your circumstances, there’s an equity release1 product out there for you.
Equity Release Advice Can Save You Money
If you choose the right equity release product, it can actually save you money.
The monthly payments are often quite a bit lower than your mortgage or other utility bills,
And if you take advantage of this before any other debts show up on your credit score and report,
Then that’s all the better for both your budgeting situation and future financial prospects.
The Cost of Equity Release Can Be High
Equity release policies can vary in price depending on what product you choose and how much of your equity the policy is deducting.
These costs may be high for some people, but they are only temporary and if you plan ahead it’s possible that this could offset any other debt or bills you have to pay.
Protect Your Family’s Inheritance
If you have children and grandchildren who are dependent on your income, then an equity release policy could be a good solution for protecting their inheritance.
You can make sure that they inherit all or part of the property when it’s time to pass away in order to help protect them from future financial worries.
Equity Release May Not Be Suitable for You
Keep in mind:
Just because equity release is suitable for one person, doesn’t mean it’s the best choice for another.
Yes – in some circumstances you could use a home sale to cover your expenses and still keep ownership of the property,
But that may not be possible if you’re renting or there are other complications involved with your situation.
4 Tips for Choosing the Best Adviser
Consider if All Advisers Equal
Some people may think that all equity release advisers are the same but that’s not always the case.
You want to make sure you find someone who specializes in this subject,
Is willing to talk with you and answer your questions without making assumptions about what type of property or income level you have.
Understand Mortgage Advisers
On the other hand.
It’s worth noting that a mortgage adviser is not the same as an equity release specialist and although they may offer advice on both topics, it isn’t their main focus.
They might be able to help you with your current difficulties,
But going through them in order to find out more about what options are available for later could end up causing confusion or problems.
Understand Financial Advisers
Similarly, a financial adviser2 is not an expert on equity release topics and won’t be able to provide you with the same level of advice as someone who specializes in this area.
They may have some answers for your current difficulties,
But going through them in order to find out more about what options are available for later could end up causing confusion or problems too.
Know If an IFA Is Preferable
If you’re unsure about what equity release product would be the best for your circumstances, then it’s worth considering speaking to an IFA.
They can look at your situation and find out which option is most suitable before you make a final decision –
Whether that means going with equity release or not at all.
13 Questions You Must Ask Your Adviser
#01. Do You Advise On All Types of Equity Release?
Your adviser should be able to advise on all types of equity releases.
If not, you may want to find someone who can offer this service instead.
#02. What Are the Costs Associated With an Equity Release Plan?
The costs associated with an equity release plan will depend on the type you choose, how much equity is taken from your home, and what level of interest rate it’s set at.
Although these costs may be high for some people, they are only temporary if you have future plans to pay off other debts or bills before any more show up.
#03. Does the Equity Release Council Safeguard Me?
The Equity Release Council is a self-regulatory trade body and they safeguard all its members.
What does this mean for you?
This means that if you’re considering purchasing an equity release plan from someone who isn’t part of the council, then it’s worth finding out what levels of protection are in place.
#04. How Do You Choose the Right Plan For Me?
It’s important to talk with your adviser about what type of equity release plan you want.
They can then look at the various options and find out which one is most suitable for your unique circumstances.
#05. What Are My Alternatives to Equity Release?
Here’s an interesting fact:
There are various alternatives to equity release.
You may be able to use your home sale as a means of financial relief but this isn’t always possible if you’re renting or there are other complications involved with your situation.
#06. What State Benefits Will I Lose With an Equity Release Plan?
An equity release plan will affect the benefits you receive from the government.
If there are other ways to solve your current difficulties, then this may not be worth considering –
But if it is and you’re planning on living in a care home or nursing home soon, making an early decision can have its advantages too.
#07. How Do You Decide What Initial Advance, and What Reserve I Should Have?
Your adviser will be able to decide what initial advance and reserve you should have based on your current circumstances.
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For example, they may recommend a smaller amount if there is little equity in the property or a bigger number so that an emergency fund can be built up.
#08. How Much Can I Borrow On a Rio?
The amount you can borrow on a Rio will depend on the type of equity release plan, when it was taken out, and what level of interest rate is set.
#09. What Are the Downsides to Taking Out Equity Release?
The main downside to taking out equity Release is that it may reduce the amount of inheritance you leave for your children.
However, if there are other options available or you don’t have any children then this could be less of an issue and worth considering.
#10. On Which Lenders Plans Do You Advise?
Your adviser should advise on the lender’s plans they feel are best suited to your needs – whether that’s a lifetime mortgage or reverse mortgage.
If not then you may want to consider looking for someone else who can offer this service instead.
#11. Will I Be Able to Have Other People Living With Me in the Future?
One of the main benefits of equity release is that you can have other people living with you in your home.
This should help to ensure it doesn’t become too lonely or difficult for someone who cannot live alone anymore,
And it also means they will be able to stay there indefinitely if necessary.
#12. Will the Provider Change the Terms/Interest Rate in the Future?
The provider should be able to give you a guarantee that they won’t change the terms or interest rate in the future.
This is necessary because if it does happen then you could end up with high monthly payments and need to revisit your equity release plan again soon after.
#13. What Happens If I Need More Money in the Future?
If you need more money in the future, then it may be possible to take out a further mortgage against your property.
This is sometimes called a “second charge” and will depend on whether there’s any equity left at that time –
But can provide an important safety net for anyone who needs extra cash unexpectedly.
Equity Release Advice vs Legal Equity Release Advice
At this point,
You may be wondering what the difference between equity release advice and legal equity release advice is.
The main thing to note is that with legal equity release, you’ll need a solicitor to help you through this process.
Your adviser will then work closely with them so it’s not necessary for you to have any other professionals involved in your case –
But it’s worth considering if you have more complicated circumstances.
The Cost of Equity Release Advice
You may also want to find out how much it will cost you for equity release advice.
This is likely to be different from one company to the next,
But some of the most common fees are around £200-£300 per hour for a face-to-face meeting and £75 per hour for phone consultations.
How Can Equity Release Advice Help Me?
This kind of plan will help anyone who no longer has sufficient income from their pension plans due to spending more time at home as a result of illness, injury, disability, or old age; someone who would like extra money every month without having to sell off all their assets; and those who want more control over their finances and the need for a carer.
How Much Does Equity Release Advice Cost?
It depends on the company or individual you’re speaking to, but some of the most popular fees for equity release advice are around £200-£300 per hour and up.
What are the Issues with Equity Release Advice?
One downside of taking out equity release advice is the time commitment involved in dealing with someone who may already struggle from memory loss or confusion as a result of their condition. This means there needs to be more consideration given around whether such plans would work for them personally at all – so speak up if things become too much during conversations.
Is Equity Release Advice Worth it?
There’s a lot to think about when considering equity release, but ultimately it comes down to your own personal circumstances. The cost of an advisor could be worth it if you feel like they can offer insights that wouldn’t have been available otherwise – or vice versa and this is something you need to consider before making any decisions on what the best option for you might be.
Equity release can be a good way to help those in later life when they need it most.
However, you should think carefully about the downsides or possible risks involved with this type of funding and be sure that your adviser is able to answer any questions you may have before making any decisions.
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Editorial Note: This content has been independently collected by the EveryInvestor advisor team and is offered on a non-advised basis. EveryInvestor may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.