February 1, 2016

Is Equity Release Safe?

ERC-LOGO-CMYK-289x300The Equity Release Council is the industry body for the equity release sector. Born from an expansion of the remit of SHIP (formerly Safe Home Income Plans) the Equity Release Council represents the providers, qualified financial advisers, lawyers, intermediaries and surveyors who work in the equity release sector.

All members are required to abide by a code of practice, which offers real tangible benefits to the customer. Anyone whom takes equity release from a member of the Equity Release Council can have peace of mind that they will always have:

  • A right to live in their home until they either die or move into long term care.
  • A guarantee that they will never owe more than the value of their property and therefore there will never be a debt left to their estate.
  • In the event of a lifetime mortgage the interest rate will either be fixed or capped so that they will know how much they owe at any one time and they will not have to worry about interest rates spiralling out of control.
  • They can move from their main residence without financial penalty.
  • They must take independent legal advice and their solicitor must sign the Equity Release Council certificate to confirm complete client understanding.
  • All applications must come from a specifically qualified adviser whom has followed a robust advice process, including the consideration of implications for you and your family.
  • All members of the Equity Release Council agree to provide fair, simple and complete presentation of their plans.

On top of these promises and safeguards the flexibility of the plans allow a whole rage of possibilities from taking lump sums to a series of smaller sums or access to the equity on an adhoc basis. More and more people are safely dipping into the equity in their properties to allow them to do various things from paying for care in their own homes, making improvements, supplementing their income, paying off debts and even helping family get on to the property ladders.

However there are many things to consider and equity release is not going to be right for everyone and for this reason it is essential people take advice from suitably qualified advisers, who will be able to discuss the potential effect on your estate and any state benefits you may be entitled to.

 

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