Equity Release in 2021

During the pandemic, the idea of borrowing against the value of your home may sound appealing to increasing numbers who are house rich and income poor.  Since 1991, more than half a million UK homeowners have used equity release to access over £30bn from their homes.   While the market remains open, equity release continues to grow in popularity and the market is evolving to meet the growing need.

Pensions are no longer adequate for many approaching retirement, and rising redundancies during the pandemic have added to household pressure.  According to Sun Life research, some of the main reasons for releasing home equity are to boost income during retirement or to carry out home improvements.  Other reasons include using money to help children or grandchildren onto the property ladder.

Equity release involves borrowing against the value of your home with a “lifetime mortgage” — a loan paid off when your property is finally sold.  While increased regulation has removed some of the pitfalls for consumers, full background research is essential with the help of a qualified financial adviser with access to a wide variety of lenders and products.

Interest rates are at historic lows for lifetime mortgages and there are currently over 350 product features across the market.  Given the market complexity, lifetime mortgages can only be sold by financial advisers qualified in equity release with the mortgages also signed off by independent solicitors. Product benefits will vary according to your personal circumstances, and there are risks involved, therefore, any and all close family members should also be part of a discussion.

During lockdown when face-to-face appointments cannot take place, professional help from financial advisers and legal representatives is rigorous with more mandatory contact points than normal.  Amongst other tools, financial advisers use the Equity Release Council’s (ERC) checklist – detailed guidance to help equity release professionals decide whether or not an applicant is suited to an equity release product – which was recently expanded from 12 to 24 points to reinforce safeguards. This means that firms need to ensure advice is suitably personalised and thoroughly documented on every occasion.

If you’re considering equity release it’s very important to seek expert advice to suit your personal circumstances and financial wellbeing.  Our equity release professionals will trawl through the small print of a wide range of providers for you to recommend the best product to suit your requirements.  If you would like to find out more, we offer an initial appointment at no cost or obligation to explore the options via a telephone call or video call such as Zoom or Skype.

Speaking to a professional mortgage adviser that works with many lenders is imperative.  For advice on the right mortgage to suit your personal circumstances, please contact the team at Howard Mortgages on 01803 554455 or contact us here.

If you’d like to read more about equity release please visit our blog here > https://www.mortgagebrokertorquay.co.uk/equity-release-blog/

Equity Release will reduce the value of your estate and can affect your eligibility for means tested benefits