Ok, so we know that Equity Release is the process by which people aged 55 years or older can “unlock equity in their home.” This is subject to meeting the lender’s requirements. It can be achieved either by a lifetime mortgage, where you receive a regular income or a lump sum leaving the interest to accumulate, or through a home reversion scheme, where an organisation purchases all or part of your home and you receive the proceeds as a lump sum, regular income or a combination of both. These schemes have a “no negative equity guarantee” (of which you can be certain if the provider is a member of SHIP) and the amount owing is paid back upon the death of the owner, or second owner if it is a couple.

People on the way to retirement or already in retirement are finding that they may not have enough income to live on or to achieve the kind of lifestyle they would like, even though they own their house outright. Increasingly, equity release may have to be considered as an alternative to increase their income or, given the current credit crunch, to consolidate debts - but it is important to note that it should only be used as having looked at all the alternatives first.

The products available have become more innovative and complex so it is important that you use a suitably experienced financial advisor and a solicitor of your own choice to advise and guide you through the Equity-Release process.

Years ago, equity-release had a poor name. Things have changed regarding releasing equity from your home. To start off with, there has been a concentrated effort to bring standards into the industry. A voluntary code of conduct overseen by SHIP (Safe Home Income Plans) is at the root of this. Then, there are many new products available today. For example, a UK law firm has introduced a new service to assist older people through the equity release process by offering the option of a home visit should the prospective borrowers be unable to visit the office. The firm has realised the value of face to face meetings for a subject where clients are potentially vulnerable. It is also good to see a return to more traditional levels of service!

Solicitors working in this area must ensure that the potential borrower owner fully appreciates what they are doing and how it will affect them. This will include all of the legalities together with the risks and associated effects of carrying out an equity release transaction. Helpfully, the solicitor will make that the ’suitability report’ which has to be prepared and delivered by the financial advisor in the case has covered every key area. This interlinking will give both practical help in that the clients will have a second explanation of everything which can only help their understanding and it also offers an additional safeguard to make sure that absolutely al the effects of the equity-release are understood.

The usual questions must be asked. Have the clients discussed this with their children and other beneficiaries in their Will? How about your tax position? Changes upon various benefits? How about if the clients have to enter residential care? Do they know that a large if not all the value of their home could be taken away from them over time? Are there alternatives that could be used, such as obtaining a grant or getting a loan from the family member? The financial advisor should go through all these points to make sure that you fully understand the effects of equity release before proceeding.

Information on this website should assist you together with the research you will conduct elsewhere. Choosing equity release will not be the solution for everyone but no financial product or package ever is. We are all individuals and no two people - even twins! - have the same financial needs and solutions.

Interest Rates are really, really low!!!

In fact they are just about as low as they are every realistically likely to get!

Obviously, that makes taking a plan out right now more attractive, but there could well be long term benefits.  Most plans operate at a fixed rate of interest so you stay at whatever rate was agreed at the outset.  There really is not much room for rates to fall further but plenty of upside, and it’ll happen at some stage, surely.  Go for Equity release now and you will be locking in at a low rate.

Makes you think, eh?

Some people who took out equity release a few years ago are actually going to be able to benefit from these incredibly low interest rates because they are so much lower than the schemes they already have.  Five years ago, or so, they would have been paying around 8%, but now it’s much more likely that they can get a new scheme at 6%.  That means that even with the costs involved in making a switch – and they will be fairly substantial – they may be thousands of pounds better off over the long term.

Perhaps, many, many thousands better off!

Low interest rates may have been a source of problem for you up until now but here they might actually benefit you.

Most people who buy a house don’t ever think that the value of their home might decrease.  This is unlike the stock market, where most people understand and accept the risk that stock prices might fall. Now, house prices have fallen, and they may fall further, too.  Equity release information shows that you can only borrow a relatively small amount of the value of your home.  It depends on your age and so on, but the percentage that you can use for Equity release is a much less than that which you can borrow when you buy a home, for instance.

This all means that the total amount that you can obtain from Equity Release Schemes has and may continue to fall.  So, you might be best having a very good look at things right now and seriously consider if this option is for you.

Call me on 0800 612 1028 or contact me using this form http://www.equity-release-expert.co.uk/61/contact-john-higgins/ if you would like some help.

Those falling house prices need not worry you too much, though, because you will have a no negative equity guarantee if you choose an Equity release Scheme forma member of SHIP.

John Higgins does not give financial advice but will help you find
an advisor that you can trust.  Please call me on 0800 612 1028.

All equity release products involve borrowing against, or selling all or part of your home, and they may work out more expensive in the long term than downsizing to a smaller property and banking the difference. They may affect your entitlement to some State benefits and grants. See Equity Release Information.

Equity Release Information

Are you worried about Equity Release and would like to know the advantages and disadvantages?  Click here to see my full range of Equity Release Information.

You can see the FSA Guide to Equity Release if you go here.

Equity Release Schemes have helped many older people increase their monthly income or create a cash lump sum. There are important things you need to know before taking out an Equity Release Scheme.

The best way of getting up to speed is to see an adviser who specialises in this area.  Call me on 0800 612 1028 or contact me by email here and I will recommend an Equity release Adviser that you can trust.

Please contact me if you need to know any Equity Release Information at all.  I do not give advice anymore but I will try my best to help you get the information that you need.

John Higgins

Contact me on 0810 612 1028 or email me to find an Equity Release Advisor near to you.

This may or may not be a good idea because there are quite a few costs involved in making the switch.

Check out the latest Equity Release News from the BBC to see if therea re any recent updates on this

John

Equity Release Advisers now have to offer you options from a Menu.  This can be quite confusing but is really intended to aid the Consumer.  I will look into this in more details and I intend to write more about this shortly.  Meantime, please let me know via my Equity Release enquiry form  what your experience of the Menu style options has been if you have had this offered to you.

John

Feel free to email me via the Contact Page if you have any queries bout Equity Release.

Please call me if you which to meet someone to discuss Equity Release and I will make a recommendation for you.  And I will not charge you for the privilege!