Why knowledge is key in the equity release market

By Carrie Ann on

Anyone even vaguely contemplating equity release ought to be aware that, as with so many things, knowledge is power. Although equity release receives increasing amounts of press coverage, many people remain unsure about what exactly it is, or how to get the best equity release deal. The equity release industry itself bears some responsibility for this knowledge gap. That said, many providers and other interested parties are making excellent efforts to ensure a wider general knowledge and understanding of the ins and outs of equity release.

A basic and, to some, obvious rule of thumb is that no-one should consider taking out an equity release mortgage, or home reversion plan that is not governed by the Financial Conduct Authority (FCA). However, even before approaching providers, homeowners need to have sought independent advice to ascertain that equity release is their best option for realising capital. Alternatives might include utilising other investments or assets, moving to a less expensive property, raising income through renting out a room, or seeking financial assistance from family members. It is also worth investigating any entitlement to social security benefits.

Those interested in equity release may also benefit from hearing about the equity release experience of their peer group. This can provide a valuable alternative perspective to that offered by either lending institutions or independent advisors. Furthermore, although certainly not mandatory, it is often advisable to seek the views of family members, especially those who might reasonably expect to inherit a portion of the value of the property in question.

Rather than approaching a single provider, homeowners interested in equity release would do well to make use of organisations such as Equity Release Supermarket, which holds information on all FCA-regulated and protected equity release mortgages, and can compare many different products. Moreover, thanks to valuable feedback from clients, we are well aware of the concerns and questions that those considering equity release may have.

Our extensive suite of online and offline tools is designed to help individuals pinpoint their own requirements and, where appropriate, to identify the equity release scheme best suited to their particular needs. These tools will include an equity release calculator to establish the maximum release of equity is possible based on age & property value. Additionally, there is a quote facility via the equity release comparison tables, where you can analyse all the equity releases schemes available by the plan type & have it posted or emailed to you.

Different individuals will have different concerns relating to equity release. Common questions include:

– What happens if I want to move house or move into residential care after taking out equity release?

– Does taking out equity release prevent someone else from moving into my property to provide me with care or companionship?

– What happens to the capital in the property if I die shortly after taking out equity release?

– How does taking out equity release affect my entitlement to benefits?

– How will inflation affect the money that I receive through an equity release scheme?

– If I take out an equity release product, is it possible that the beneficiaries of my will could be deprived of any of the value of my property?

The questions, and the acceptable answers, vary depending on the circumstances of those asking them. However, it is crucial that they are aired and that those within the equity release industry understand that they have a duty to provide relevant information. The most enlightened providers may also understand the benefits of sharing the equity release experience of those who have already taken out an equity release mortgage or home reversion plan with those who are considering doing so.

If you have similar questions and looking for answers visit the Equity Release Supermarket website where you can find, or request information from their team of specialist nationwide equity release advisers.

Categorised in: Equity Release Mortgages
This post was written by Carrie Ann