Do You Have Any Query about Equity Release Scheme?

Most of you would have dreamt of a lavish retirement but when you get into the real world of retirement, the truth might be frightening. When your financial life seems to be shattering, equity release can prove as a Good Samaritan by providing you enough capital to fund a dream retirement.

However, there are some frequently asked questions about releasing equity from house by the prospective as well as existing consumers. Take a look at a few questions that might be running into your mind.

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Question: How safe is equity release?

Answer: This scheme is safe and secured, if you have gathered all the required information about it. There are several rules and regulations enforced by the Financial Services Authority that safeguard the interests of consumers. The most striking thing about equity release is that there will be no negative equity on your house under any circumstances.

Q: How will I know if this scheme is right for me? 

A: The Equity Release Council has made it mandatory to seek advices from financial experts, who have in-depth knowledge of the equity release market. They listen to each and every need of yours and provide a solution accordingly. If anytime during the interaction, they find that this scheme is not good for you, financial advisers will provide you the honest suggestions.

Q: How is the loan repaid and what about inheritance?

A: If you go for life time mortgage plan, your representative has all the right to arrange for selling off the property and repay the loan amount with the rolled up interest rates. Any left amount is retained by your representative or family members. Under the home reversion plan, as you have sold complete or part of your property to the reversion provider, they will arrange for the sale.

Q: Can loan amount be repaid early? 

A: Yes, you can repay the loan amount early; however, you may have to pay some early repayment charges. The amount to be charged varies according to the scheme provider, some may charge for first 5 or 10 years whereas others charge you for the entire term of the plan.

If you have chosen a fixed rate to pay under the interest only mortgage and want to repay the loan early, you may be charged a redemption penalty.

Repaying the loan under home reversion plan is intricate, as you will have to buy back the sold proportion of your house at market value. This might be very expensive and you must not see it as a short term commitment.

Similar to these there are several other queries in the mind of customers. If any query still persists into your mind, feel free to seek a solution from the financial advisers.

Equity Release Scheme has a Bright Future, Financial Advisers Feel

Analysis from a leading mortgage service provider says that 96 percent financial advisers believe that equity release can help retired citizens, who are lagging behind on pension or dealing with mortgages. This plan can also be helpful in paying off other debts in retirement.

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This survey on equity release market highlights that more advisers are interested in catering their services to a large number of clients. They also acknowledge it as a part of their business and can only grow with their hard works.

Some professional believe equity release as a worthy solution to boost living standard in retirement. Besides paying off debts, equity release can also help in funding long term care cost.

However, most financial advisers believe that there is a need of improvement and awareness of equity release products and its potential benefits amongst the consumers.

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Out of all the financial advisers surveyed, only 33 percent were qualified or offering services of qualified individual in their firm and only 10 percent participated energetically in the lending services in equity release market.

Financial advisers were asked about the reasons preventing equity release advice to top the marketing priority and they reasoned interest rates behind it. Equity release interest rates are high and that is the reason why most people prefer not to take equity release. A large number of people are also mulling over other market opportunities that are available at lower interest and are cheap.

While advisers are well versed with products in equity release market but less than half are qualified to lend services themselves or from someone else who is qualified in their firm to advise clients.

Although, they can refer the clients to someone, who is expert on this matter and qualified, but most of them like dealing clients in house.

Some financial institutions work with top equity release providers and expert advisers in equity release market to provide beneficial services to clients.

The research mentions that 50 percent of unqualified advisers are willing to obtain necessary qualifications to provide expert opinions to clients.

The financial advisers prove to be handy in clinching a beneficial equity release deal. They help you evaluate property with equity release calculator and let you know the equity amount you will be able to withdraw from your house.

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Equity release has taken out millions of pensioner household from poverty and continues to doing so. With a rising number of retirees in UK, it is expected that importance of equity release scheme will continue to be felt for a long time.