Equity release is becoming more and more popular with people who want or need to release extra cash in their later years. Figures from the Equity Release Council in November 2017 have shown the market has grown significantly. It has stated the over-55s have withdrawn a total of £824m in equity release from their homes in the third quarter of 2017, representing a 44 per cent increase on the previous year.
Available to homeowners aged over 55, equity release schemes allow you to access part of the cash tied up in your property as either a lump sum or as smaller, drawdown amounts, while still living in your home.
Those taking advantage of the scheme are using the cash for all manner of purposes, from funding grandchildren at university to paying off debts, home improvements and going on the holiday of a lifetime. The choice on how to spend the equity release proceeds is purely down to you.
If you are looking at the possibility of equity release, you need to ensure you get the right advice and information, which means finding an equity release specialist who knows what they are talking about.
Thankfully, there are ways and means to ensure you employ the services of a qualified equity release advisor who can be relied upon to guide you through the pros and cons of each scheme.
Giving advice on financial products such as equity release is regarded as a regulated activity. This means that all advisors should be approved by the Financial Conduct Authority (FCA), and should hold a recognised qualification.
Look out for an equity release specialist with either a Certificate in Regulated Equity Release (CeRER), which is provided by the Institute of Financial Services (IFS), or a Certificate in Equity Release (CER), which will have been awarded by the Chartered Insurance Institute (CII).
You can search for an advisor or company on the Financial Conduct Authority website, and you can also check if your chosen equity release specialist is a member of the Equity Release Council by going to their website.
Experience is essential for any equity release advisor, afterall this will be one of the biggest financial decisions you will make during your lifetime. If your advisor has plenty of experience, they will know more about the schemes available & how the 90+ schemes they will nee to research could potentially be the solution for you.
Also note that any independent equity release advisor should not be tied to a particular provider - they should instead be giving you advice on a wide range of products and the firms providing them. Before deciding, do your research & establish what fees the equity release broker will charge for their services.
This could be a fixed fee arrangement, usually paid upon completion, or even a percentage of the loan levied upon completion. Obviously, the latter company’s stance will still impose a minimum fee, and therefore those looking for higher equity releases would normally consider the fixed fee route.
No reputable equity release firm should charge any fee upfront, why should they when so many quality firms will provide a free initial consultation. All equity release advisors should disclose their status, plus fees and charges upfront using a client agreement, so ensure you are fully aware of who you are dealing with & what they will charge for their services.