If you are considering an equity release product we always recommend that you talk to one of our qualified advisers first. Our advisers will be able to meet you face-to-face or, if that is not possible, advice can be given over the telephone. They will be happy to discuss your needs and help you make a decision about whether equity release is right for you.
In December 2020 the Equity Release Council published its Best Practice Guide for advisers.
Its website says the guide “encourages advisers to respectfully and robustly challenge clients’ motivations, in order to identify a solution that best fits their short, medium and long-term needs”.
The ERC also provides its members with a Checklist to complete when meeting with potential customers. This list ensures the right questions are asked of the client before they make the final decision to take out an equity release product. These questions could include checking if other options such as downsizing or using savings would be better for their individual needs.
But what else does an equity release adviser do?
1. Help you choose a product
As with any financial product such as mortgages or loans, there are dozens of different equity release options on the market. They will all be broadly similar but may differ as far as how much they will lend, their interest rates and any other elements such as early repayment charges.
This can be a minefield for anyone not familiar with the industry. An equity release adviser will ask you lots of questions to find out everything about your financial situation to work out which product suits you best. If equity release is the best option, they will also be able to contact the recommended lender.
2. Check if any other benefits you receive will be affected
Local authorities and the government use your income and savings to assess your eligibility for state benefits. If these change due to the release of cash, you may no longer be entitled to some means-tested benefits or the amount you receive could be lowered.
However, a qualified equity release adviser will be able to make sure you take out the right product for your circumstances so you can avoid any issues with your benefits.
3. Help you get the most amount of cash you can, where appropriate, if that is what you require
An adviser can help you find the product with the best interest rate and lowest charges. As mentioned above, some lenders will charge for an early repayment. An adviser can help you find one which allows you to downsize and pay off the loan, without incurring an extra fee.
They will also be able to help you find a product which allows you to pay off the interest each month. This means you will avoid the interest rolling-up over time which can leave clients with a large debt. Other products allow you to take out the loan in small amounts, rather than a lump sum and this can also reduce the amount of interest you pay.
4) Help you protect your loved ones’ inheritance
You should always discuss your plans with your family before you consider equity release. Other financial options open to you could include borrowing money from relatives, remortgaging your home or downsizing.
If you choose to release equity this means the value of your estate will decrease and once your loan is paid off when you die or go into long-term care, your family may not be left with much of an inheritance. An adviser will be able to point you towards a product which may allow you to ring-fence some equity as a guaranteed inheritance.
:: Use our Equity Release Calculator to work out how much cash you could release.
It is important to take expert advice on equity release before deciding whether it is right for you. Contact us to find out more from one of our highly trained advisors throughout the UK – from Oxfordshire, Warwickshire to Wiltshire.