The equity release myth buster
Many people could benefit from releasing the equity value tied up in their home. This could provide you with extra income or a lump sum for a new car, home improvements or helping the grand children go to college. The problem is that people don’t know the facts about equity release and are understandably frightened that it might be an unwise thing to do. To help with the decision, our colleagues at Bower Retirement have produced an equity release myth buster to correct the common misconceptions around equity release.
In the 1980’s there was a mini equity release boom in the UK but unfortunately, the products offered at that time were not regulated and allowed firms, many of which were unqualified to give poor advice on equity release.
We’re delighted to say that things have changed!
As a result of the Safe Home Income Plans (SHIP), the Equity Release Council and Financial Conduct Authority (FCA) regulation equity release is now “policed properly” and the business is honest, fair and effective so that consumers get a fair deal.
Although the market is going from strength to strength with lending reaching over £3b in 2017, there are still many equity release myths flying around which could be holding thousands of people back from considering it as a financial option. Thousands of people who really benefit from equity release.
“I’ll lose my home” – MYTH
With all equity release plans, you can remain in your property for life, provided it remains your main residence. With lifetime mortgage plans you still own 100% of your property so could never be forced to move out. Plus, all Equity Release Council plans offer a ‘No Negative Equity Guarantee’ which means you will never owe more than the value of your property when it is sold. This also means that you will not pass on any debt to your loved ones.
“I can’t leave an inheritance”- MYTH
If you have an equity release plan you can still leave an inheritance for your family. With some plans, there is the optional feature of the “Inheritance Protection Guarantee” which allows you to protect a fixed percentage of your home’s value for your beneficiaries.
“It’s not regulated”- MYTH
Today, all equity release plans are regulated by the Financial Conduct Authority. On top of this, Equity Release Council approved plans come with a set of guarantees that act to protect your financial future.
“I won’t be able to move house” – MYTH
You have the right to move your plan to another suitable property without any financial penalty.
“I’ll have to make monthly repayments” – MYTH
With a lifetime mortgage (equity release), you do not need to make any monthly repayments. However, you can if you want to. You decide whether you repay all, some, or none of the interest over the life of your plan. As with all lifetime mortgages, the loan plus interest continues until the plan comes to an end, usually when you pass away or move into long-term care. At this point, the property is sold to repay the original sum borrowed, plus any interest that’s accrued.
Now that you know the truth if you would like to find out more then give us a call on 0151 236 4440 or 01704 542 993. You can either get a home visit appointment or you can get details of our fact finding equity release seminar which is being held on 27 February.