Equity release is a big decision and you will likely have a lot of questions for your adviser. When you are searching for the right person or company to help you decide if equity release is the right choice for you, it is important to ask the right questions to assess their knowledge of the industry.

This guide is designed to help you prepare for your consultation and to get the information you need.

What are the pros and cons of equity release?

Equity release might be the right choice for you, it is important to look at the pros and cons before making this important decision. Whilst equity release can have many benefits and can improve your quality of life, there will also be drawbacks. These include your debt increasing because of interest, reducing the value of your estate, and impacting your future eligibility for means-tested benefits.

When considering equity release there is a lot to think about and our qualified advisors will be able to give you professional advice and a full overview of the pros and cons so you can decide if it is the right choice for you.

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What are the costs involved when you release equity?

There are different costs associated with equity release and you need to be aware of these before taking out any equity release plan. These costs include possible fees from the lender, including an upfront valuation fee and an arrangement fee and any Lifetime Mortgage plan will attract interest.

There are also solicitor costs because you are required to have legal advice before taking out any plan. You will also be charged by any equity release advisors and this is normally an upfront fee and a completion fee. Our equity release advisors will be able to list these costs for you.

What happens when I die or move into long-term care?

It is natural to know what will happen to your equity release plan in the future. When you pass away or move into long-term care, your equity release plan will need to be repaid. Your beneficiaries must inform the equity release lender and in most cases, they will have 12 months to repay your plan. They will ask for a copy of the death certificate and probate certificate, so they can speak with the executors of the estate.

The loan will remain outstanding and interest will accrue until it is paid in full when your property is sold. For plans held in joint names, it would normally be the surviving plan holder who contacts the lender. The loan will only need to be repaid on the death of the remaining plan holder. Our equity release advisors can tell you in more detail about this.

Can I go into negative equity if I release equity from my home?

A property that is in negative equity means that it is worth less than any mortgage or plan you have on it. This is an important question to ask any advisor. As members of the Equity Release Council (ERC), we only recommend Lifetime Mortgage products with a ‘no negative equity release guarantee’ so you can never owe more than the value of your home. The ERC promotes safe equity release products and safeguards the interests of homeowners.

What interest do you pay on equity release?

There are many different plans available with varying interest rates. Current interest rates are at record lows and any rate will be fixed for the duration of the plan. With a Lifetime Mortgage, the most popular type of equity release plan you are under no obligation to repay the interest as you would with a traditional mortgage. If you choose to not repay the interest, it will build up over time and be added to the sum that is owed. Our equity release advisors have access to the whole of the market and will be able to find the right product and interest rate for you.

What are the alternatives to equity release?

There are many alternatives to equity release and any equity release advisor should discuss these with you. Our team has access to interest-only retirement mortgages and residential mortgages.

There are also many other options including re-mortgaging with an existing mortgage, moving to a more affordable home, state benefits, renting out a room in your property, grants, changing employment, and other options. Our advisors will always explore these with you.

How do I know which equity release loan is right for me?

Equity release is a specialist product and as equity release specialists, we can look at your circumstances and goals to find the right product to suit you. There most popular type of equity release is Lifetime Mortgages and there are hundreds of different products available.

We can search across the market and provide impartial and independent advice and recommendations around the best product to suit your requirements. We can provide you with a personal illustration, summarising the important details of the product that you need to know and understand, along with a clear estimation of the costs involved. See our short explainer videos.

Book your consultation now and our equity release specialists can answer your questions. We can come and meet with you wherever you are based – we work across the UK, and can provide equity release advice in Southampton to Northumberland. Contact us now.