Equity Release Adviser

Equity Release Adviser (1)

This page was last updated on 1 December 2021

Equity Release Adviser In 2021

In this article, we look at finding an equity release adviser.

What is Equity Release?

Equity release is a way of accessing some of the money tied up in your home without moving out of it. It’s different from a mortgage as you’re not borrowing to purchase something, rather borrowing against the value of your property. 

You may be able to access between 25% and 60% of its value depending on your circumstances and how much has been paid off on the property.

How do I find an Equity Release Adviser?

Finding an adviser that specialises in equity release isn’t always straight forward as many advisers don’t have specialist training or experience with this kind of financial product. Therefore, you need to find someone that is a specialist in providing equity release advice.

A good place to start looking is through a comparison website.

You can then contact advisers directly for more information or advice. If you’re unsure about what kind of adviser would be best, you could consider contacting a fee-only independent financial adviser.

Topics that you will find covered on this page

You can listen to an audio recording of this page below.

 

How does equity release work?

Equity release involves borrowing against the value of your home. The way it’s done can vary depending on which company you choose to work with

The most common form is via a lifetime mortgage where the money, usually as a tax-free lump sum, is released in stages over time, often on an interest-only basis. 

Another type is using a solicitor for a process called “deed of variation” which uses the equity in your home to secure a repayment plan for someone who inherits property when you die or if they are dependent on you.

The amount that you repay will be based on the interest rate of the product that you get.

How does working with an Equity Release Adviser affect my options?

Every individual has different circumstances and not everyone will be able to access equity release schemes. When choosing an adviser, it’s important to find one that understands all the options and can help you make the right decision for you and your family. The adviser should be able to give expert advice, so you need to find someone who really knows their stuff.

Though equity release schemes are available in some form to everyone, not everyone will be eligible or have the option of taking out a lifetime mortgage plan. This is because there are certain restrictions on who can access this type of scheme. An adviser that is familiar with equity release products may know if you’re eligible for this kind of product even if they don’t offer it directly themselves.

For example, some advisers may recommend working with an organisation that specialises in lifetime mortgages if that’s what you would benefit from most

By using an adviser with specialist knowledge, you could benefit from an increased understanding of the options available to you. This means that it’s more likely you will get access to the product you need and someone who is best suited to your circumstances.

Advisers may be able to provide you with support in choosing the right provider for your needs or give expert guidance about how these products work, including any risks involved. They should also be able to help answer any questions, concerns or worries you have so that you feel confident about moving ahead.

A good equity release adviser will also ensure that you only use products that are regulated by the Financial Conduct Authority. All good advisers also abide by the rules of the Equity Release Council.

equity release advisers (2)

How much does equity release cost?

Equity release is a form of borrowing, so it’s important to understand what the costs would be. Before agreeing to anything, you should speak to an adviser about any fees that might apply and how they would be paid.

Typically, the advice is free but some financial advisors may charge an advice fee.

There will usually be an arrangement fee which may include stamp duty on the property, a valuation fee, and legal fees if your solicitor is involved in preparing a deed of variation.

You may be able to access between 25% and 60% of its value depending on your circumstances and how much has been paid off on the property.

In some cases, there could also be other factors such as interest charges and administration charges so it’s vital that you find out exactly what these are before committing to the plan.

With interest rates being low, there are some really good deals to be had. You can get an equity release mortgage for rates around 3% at the moment. Each equity release provider will set its own rates.

Your monthly repayments will be agreed upon between you and the equity release company.

How much money can you release with equity release?

The amount of money you could potentially release will depend on a few things. One is the value of your home and how much equity you have. The other is what scheme your chosen company offers. The amount you can release will depend on your current circumstances and whether the scheme you’re interested in meets those circumstances.

In some cases, you may be able to borrow 100% but this isn’t typical as lenders want to see that repayments could still be made from your income over and above any costs such as housing and living expenses. 

Normally, a lifetime mortgage or home reversion plan would allow borrowers around 30% to 60% of their equity – so it’s important to find out exactly what figure is available before making a decision.

Equity Release Calculator

An equity release calculator can give you an indication of how much equity you could release and the costs involved.

You should also bear in mind that there is no such thing as a standard calculation and lenders may vary their offers for different people with the same circumstances – so it’s essential you get expert equity release advice.

Why you should seek equity release advice

You should seek expert equity release advice because it can help you make the right decision for your circumstances. It could also ensure that it’s done properly, so there are fewer risks involved and the opportunity to achieve what you want is maximised.

An adviser who knows their stuff should be able to show you how much equity you have in your home, explain what options are available to you and provide expert guidance about which products best suit your situation.

If necessary, they should be able to put you in touch with an organisation that specialises in lifetime mortgages for pensioners, and others, or any other type of equity release scheme to ensure that everyone understands your situation and nothing is left out

Equity release advice can save you money

Getting advice can save you money because it can help you avoid mistakes that might cost you time, money or an unexpected financial burden. For example, it would be a bad idea to release equity when there are immediate plans to move home.

By using expert advice, an adviser should be able to show you how long you have before you need to make any repayments and what they might be – which in turn will help give you peace of mind that this is the best option for your situation.

It’s also important not to rush into anything without understanding exactly what the product involves and the pros and cons involved in taking it up, otherwise once you’ve signed up, it could leave things open to being exploited or misinterpreted.

Equity release may not be suitable for you

Equity release is typically not suitable for everyone.

If you are the only person with a stake in your home, it may not be suitable. For example, if you are remortgaging to release cash but your partner isn’t able to raise any extra funds, this may not be ideal – as they would have no equity in the property.

You should also bear in mind that borrowing against equity will reduce the amount available and think carefully about what happens if you were to die before making all repayments.

However, equity release is often something families can plan for by consulting an expert adviser who can show how much equity might be ‘released’ and the costs involved.

Equity release shouldn’t be seen as a quick fix to sort out immediate financial difficulties. On the contrary, having an expert guide you through what’s available and how much it might cost will help make sure that this is truly the right decision for your situation.

It can also ensure that when considering equity release options, you think about what might happen after you’ve gone – such as wills, safeguards to protect your home and transferring ownership of properties to family members.

Getting advice on a lifetime mortgage

Getting advice on a lifetime mortgage will help you understand how much equity you have in your property and the costs associated with it.

For example, if you were to take out a repayment loan, how much interest would be charged each year and whether making regular repayments over time would reduce the overall amount owed.

Typically any money released by taking out an equity release plan is free of income tax – so could provide some valuable retirement income.

It won’t affect state pension, however, as these are paid regardless of whether an individual has any other income or not. But it could impact other means-tested benefits.

Equity release may also guard against care costs because it boosts the funds available should that become necessary in old age. It could also allow older homeowners to maintain their independence for longer.

Getting advice on a drawdown lifetime mortgage

Getting advice on drawdown lifetime mortgages will help you understand how much drawdown income is available and the ongoing costs associated.

For example, if you were to draw down £7,000 per year from your drawdown fund, this would reduce the value of the drawdown by around £100,000 over 20 years.

A drawdown option can be a helpful way to provide relief for loved ones and ensure that future generations still have some equity in the home after you’re gone – making it an ideal way to plan ahead and consider what happens when you’ve gone.

best equity release advisers

Getting advice on a home reversion plan

Getting advice on a home reversion plan will help you understand whether this is the best option for your situation, how much it costs and the drawdown rates that are available.

For example, if you wanted to release cash today with no further repayments after, then this could be an ideal solution if the value of your property means there would be some equity available. However, getting financial advice will ensure you consider all your options so that it’s right for your current needs.

It’s also important to think about what may happen when you’ve gone – for example, who might inherit the remainder of the proceeds if your lender sells up once they have been repaid? Also what happens should a death occur before full repayment has been made – including any potential inheritance tax implications.

Home reversion plans can be a helpful way to provide relief for loved ones and ensure that future generations still have some equity in the home after you’re gone – making it an ideal way to plan ahead and consider what happens when you’ve gone.

What is a negative equity guarantee?

With a negative equity guarantee, if property values fall even further you won’t owe any extra money. It could be the ideal way to plan ahead and ensure that your loved ones aren’t at risk of losing their home should future property prices decrease.

A negative equity guarantee means that you will no longer have to worry about the value of your house decreasing as it already covers this eventuality for you – so can provide peace of mind.

See how much money you could be entitled to using the equity release calculator below

 

Want to find the best equity release deal or speak to a specialist to have your questions answered?

You can contact Key Equity Release, our partners, in one of 3 ways.   

  • Option 1 – Call directly on – 0333 567 1607
  • Option 2 – Book an appointment directly in the calendar below, and one of the Key team will call you back at your chosen time to discuss your requirements
  • Option 3 – Leave your contact details below and we will get in touch with you.

 

Option 1 – Call directly

Mon – Thurs – 9am – 8 pm

Friday – 9am – 5:30pm

Saturday – 9am – 5pm

Option 2 – Book an appointment, in the calendar below, for an equity release specialist to call you back when its convenient

Option 3 – Leave us your details and we will get in touch

Leave your contact details below and one of the equity release team will give you a call to discuss your needs.

Please note that all calls are undertaken by Key Equity Release, the UK’s leading equity release specialists. Key Equity Release is a trading name of Key Retirement Solutions Limited which is authorised and regulated by the Financial Conduct Authority

Article author

James Lloyd

I am the primary writer and author for Help and Advice, having originally helped start the site because I recognised that there was a need for easy to read, free and comprehensive information on the web. I have been able to use my background in finance to produce a number of articles for the site, as well as develop the financial fitness assessment tool. This is a tool that provides you with practical advice on improving your personal financial health.

Outside of work I am a keen rugby player and used to play up to a semi-professional level before the years of injury finally took their toll.  Now you are more likely to see me in the clubhouse enjoying the game.

Email – james@helpandadvice.co.uk

Linked in – Connect with me 

Frequently Asked Questions

What is Equity Release?

Equity release is a way of accessing some of the money tied up in your home without moving out of it.

How do I find an Equity Release Adviser?

Finding an adviser that specialises in equity release isn’t always straight forward as many advisers don’t have specialist training or experience with this kind of financial product.

How does equity release work?

Equity release involves borrowing against the value of your home. The way it’s done can vary depending on which company you choose to work with.

How much does equity release cost?

Equity release is a form of borrowing, so it’s important to understand what the costs would be. Before agreeing to anything, you should speak to an adviser about any fees that might apply and how they would be paid.

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