Releasing equity in your home is a major financial decision. The choice of equity release products available has never been greater, with an increasing range of features to suit individual needs. There are many benefits you could enjoy but, as with any financial product, you may be wondering how safe it is.
At Access Equity Release, we believe it is important to be fully informed about all the features and implications of equity release before you decide whether it is the right option for you. We hope this blog will ease any concerns you may have about how safe equity release is.
Equity release is regulated
It reassures many people to know that equity release is fully regulated by the Financial Conduct Authority (FCA). This means that anyone giving advice on the two types of equity release – lifetime mortgage or home reversion plan – must be authorised to do so by the FCA.
In addition to this basic regulation, many providers and advisers are members of the Equity Release Council (ERC). This is the trade body for equity release professionals, which works to raise standards and ensure customers receive the best possible advice and service.
Members of the ERC sign up to a strict code of conduct to provide additional safeguards for customers. These include the “no negative equity guarantee”, which means you will never owe more than the value of your property. ERC members will also insist that you obtain independent legal advice as part of the process.
Good quality advice is important
Demand for equity release is growing. The ERC’s last quarterly report found that the number of product options had more than doubled in the space of a year. This massive increase makes the need for quality advice more important than ever.
Access Equity Release is authorised by the FCA and is also a member of the ERC. You can be sure that our qualified advisers will always explain all the options available to you and the implications. They will provide you with all the relevant financial advice to help you make a decision on whether equity release is right for you.
From your first point of contact with us, you will receive a personalised service with a dedicated adviser. We get to know you so that we can put together a plan to suit your individual circumstances. We explain everything in plain English, without industry jargon (we hate it too!). Our advisers are authorised to look at other regulated products so if equity release is not the best option for you, they can present a list of alternatives.
The benefits of lifetime mortgage
When making your decision, you will have to weigh up the potential benefits and other implications. These are some of the benefits you could enjoy, depending on the products available to you:
- Tax-free cash to spend how you like
- Continue to live in your own home
- Access to a drawdown facility in the future (if you choose this option)
- No monthly repayments (unless you want to make them)
- Interest rate typically fixed for life
- The no negative equity guarantee
- Protect an inheritance for your loved ones (if you choose this option)
- Flexibility to move home (subject to certain criteria and possible partial repayment)
What’s the catch?
There is no catch. However, as with any major financial decision, you must consider all the implications carefully. Our qualified advisors will help you to do this so you can be fully informed before deciding whether equity release is right for you.
It is important to bear in the mind the following points about lifetime mortgage:
- You will be charged interest on both the loan and any interest already owed. This is added to the total amount secured against your home
- If property values fall, it will affect the equity available to you or your estate
- A lifetime mortgage will reduce an inheritance
- It may affect your eligibility for state benefits
- You may incur early repayment charges if you choose to repay early
- There may be cheaper ways to borrow money
- Releasing more from the full loan amount later may cost more or less depending on the interest rate at the time
Contact us for further advice
If you would like to know more about equity release and the latest options available, please get in touch and one of our advisers will be happy to offer you a personalised service. The experts at Access Equity Release can help you find a solution that is suitable for your circumstances.