is equity release safe

They must also follow the FCA’s strict codes of conduct. Any equity release company that has the Equity Release Council logo on their material must ensure you can still live in your home until you die or move into permanent care. Your solicitor will ensure all paperwork is in order and help you avoid any legal issues. The main drawback to equity release is that it will reduce the inheritance you leave your family. You must receive financial and legal advice. The good news is that there are ways to mitigate this. All equity release products are regulated by the Financial Conduct Authority (FCA) with all lenders being members of the Equity Release Council . Learn how they work. A flexible cash reserve allows you to receive money in smaller amounts. To help customers decide whether equity release is right for them, a number of companies provide a free equity release calculator to show a rough estimate of the amount of equity th… Fixed early repayment charges, knowing exactly what the penalty may be, if you wish to repay your plan early. Lifetime mortgages that allow you to release tax-free cash as a single lump sum payment. Equity release is just like any other mortgage, in that the sum borrowed must be repaid with interest at a future date. Mortgages that continue into retirement based on income and affordability. Although this wasn’t always the case, all equity release products and practitioners are now regulated by the UKs financial services watchdog, the FCA. Require monthly interest only repayments. Equity Release Supermarket can provide a panel of qualified equity release solicitors to choose from, who can handle your application. Why is it important to have expert financial advice when taking out an equity release plan? There are many benefits you could enjoy but, as with any financial product, you may be wondering how safe it is. These include: Equity release is an advised financial product, which simply means that you cannot take out a plan without having taken appropriate financial advice from a suitably qualified professional. Equity release products are safe as they’re regulated by the Financial Conduct Authority (FCA) and governed by the Equity Release Council (ERC). As well as getting to know you and talking to you about your financial circumstances, your adviser will look at the whole equity release market and recommend the best product for you. A SAFE (simple agreement for future equity) is an agreement between an investor and a company that provides rights to the investor for future equity in the company similar to a warrant, except without determining a specific price per share at the time of the initial investment. These can help you manage the future balance of your lifetime mortgage by reducing the balance on which interest is charged. Calls may be recorded and monitored for training purposes. to learn more about the protections that are in place that make equity release a safe way to borrow. In this guide we’ll look more closely at the ins and outs of releasing equity from your home, to help you understand the topic better and make an informed choice. This means you can repay a plan without penalty within three years of a partner dying or going into long-term care. If you are releasing equity via a lifetime mortgage, so long as you comply with the conditions of the mortgage your home will remain yours and any increase in its value is yours. Their code of conduct states that: Equity release products can only be taken out after receiving advice from a specialist, regulated adviser. However if you are prepared to look at Equity Release, then be assured that there are many Safeguards and Guarantees in place to protect you. Key are authorised and regulated by the FCA, and we pride ourselves on ensuring all of our processes and recommendations are clear, fair and not misleading to our customers. By continuing to use the site you are agreeing to our use of cookies. Many years ago, the equity release schemes that were available were not regulated. Alternatively, we can call you. The new breed of plans also come with a wide range of features and options, which you can tailor to create a plan that is right for you, both now and in the future. Calls to freephone numbers are free from UK landlines and personal mobile phones. As an industry, it is now regulated by the Financial Conduct Authority which ensures the safety of the plans on offer. As mentioned above, you must have at least one face to face meeting with an independent solicitor during the equity release process. Is equity release safe? If you are releasing equity via a lifetime mortgage, so long as you comply with the conditions of the mortgage your home will remain yours and any increase in its value is yours. If you’re thinking of taking an equity release plan, you can rest assured that our advice is fully regulated by the Financial Conduct Authority and the plans we recommend meet the Equity Release Council standards. Plus, all equity release plans come with a no negative equity guarantee. Equity release offers safeguards that traditional mortgages don’t and it’s a good idea to understand what these are while you are thinking about taking out an equity release plan. This is an area of critical importance when you’re planning to release money from your home. There are several alternatives to equity release that may be more suitable, depending on your circumstances: Unsecured loans. Compassionate early repayment charges, allowing penalty-free repayment of a plan within three years of a partner dying or moving into long-term care. receive any more emails or calls from us at any time. Lifetime mortgages carry a no negative equity guarantee to ensure your estate won’t have to pay back more than the amount received from the sale of your home - provided the terms of the mortgage are being met. Equity release could present a few financial risks that you should be aware of. RIO Mortgages continue into retirement based on income and affordability. There are though many ways that you can manage the balance, through the lifetime mortgage plan and the features you choose. Health conditions could help you borrow more money. Many factors determine the size of your equity release loan. Is Equity Release Safe? Our OneFamily advisers are qualified, experienced and salaried – not working on commission. The most popular plan is a lifetime mortgage - where the homeowner retains ownership of the property but the property is charged with the repayment of a loan or mortgage, which accrues rolled-up interest over the period of the homeowner's lifetime. It’s important to talk to your adviser about any means-tested benefits you might be claiming as the sum you receive from equity release could have an impact on your entitlement. If equity release isn’t right for you, we’ll tell you. It’s always a good idea to talk through these with your equity release adviser but these include -. The UK equity release market is basically made up of two types of equity release plan. Important: The loan amounts above are an illustration of the amount you could borrow. Learn how these lifetime mortgages work. Income periods of between 10 - 25 years are available to meet your retirement income needs. Get more information on our website: https://www.keyadvice.co.uk/equity-release However, because the interest is compounded, the outstanding balance can increase significantly over time. And as the loan increases so does their fee, even though the advice process stays the same. The actual amount may vary depending on your individual circumstances. Our friendly team of advisers are ready to help you, so why not spare a few minutes for a free initial consultation? Key Equity Release can help you discover if equity release is right for you. What is Equity Release? Click on the button below to complete a short form and we'll call you back within 30mins. Learn all about equity release. Learn how they work. If you choose to pay off your plan in full or in part, you can incur early repayment charges. Discover how much money you could release across all the available equity release plans. 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