Equity Release

dunstonh

I thought it was an excellent product with a known high street lender 

Its more expensive than many of the other well known providers (who actually tend to be insurers rather than banks or building societies).   Did you go direct to Nationwide or use an IFA or whole of market mortgage adviser (with equity release permissions)?     - just wondering as its not what you would expect to see on a whole of market recommendation.

chickalittle

If you go to one of the Equity Release/Life time mortgage providers they will only advise on lifetime mortgages. Try and find a mortgage broker who is also qualified in Equity Release but can look at all options for you - whether it be a lifetime/equity release mortgage, retirement interest only  or a standard mortgage. 

Cannymoney

It's really important to think of everything you need answers to before deciding. However there will always be some questions we don't ask as we don't know we need to.  I ensured my product was portable but was recently surprised to find how far into the purchase process it takes to get a decision on another property.  I've copied my post below from another MSE ER forum - hope it helps.  And if anyone has an opinion for me I'd be very grateful.

Does anyone have experience of transferring an equity release loan to a new property?  I am clear about what fees are involved. However, the E R company tell me they do not approve a property until you have offered on it, been accepted, applied to the ER Co., had a valuation and application accepted.  I cannot imagine a seller or estate agent regarding me as a desirable purchaser given what looks like several weeks of delay and uncertainty, possibly having to withdraw offer if ER Co. don't approve property.  If I sell before buying another property, the E R Loan is automatically terminated, with all relevant charges including a hefty early repayment fee.  I would then not have a property to request E R against and a much smaller amount to buy another one.  I am grateful for what I have but have made huge sacrifices throughout my life to have financial security in old age and with possibly only a few years of my life left it does not make sense to have all my "assets" in a property and be struggling to pay bills, buy food etc, let alone have a few treats.  I could of course stay where I am but due to change of circumstances would like to move nearer to family and friends in another area. 

pleaseme

Wow thank you that’s interesting l was under the assumption if you moved once you had the ER it was easily transferred to your new property.  Did you regret taking out your ER bearing in mind the interest accumulating.  I’m 69 my partner 66 and at our age can’t afford to make any financial mistakes but would really like to buy a small property in Spain. We don’t want to chance selling up at our time of life 

Onlooker2

For more discussion and opinion from both sides of your coin look up Lifetime Mortgage

lostkey

Following an IFA’s advice I took out an ER loan in 2009 at a rate of 6.5%.  In 2014, following advice from the same IFA, I moved the loan without incurring any early repayment charge to Aviva at 5.6% 

Recently I had a letter from the same broker asking me to consider switching again as loans were now available at 2.8%. However when I enquired I was told that the £10000 ERC attached to my plan meant that there would be no benefit in moving to the lower rate until 8 years had elapsed.

In essence in 2014 my broker moved me from a plan with no lock-in to one that has. Consequently I am now locked out from rates that are available to new borrowers. Neither the broker, nor Aviva, have shown any sympathy.

pleaseme

that’s awful it would eat away at my sole. I think the interest rates are very reasonable at the moment.  I think l need to see an independent  broker and go through my options. As l initially mentioned  l want to buy a holiday home that all my family can benefit from.

csgohan4

lostkey said:

Following an IFA’s advice I took out an ER loan in 2009 at a rate of 6.5%.  In 2014, following advice from the same IFA, I moved the loan without incurring any early repayment charge to Aviva at 5.6% 

Recently I had a letter from the same broker asking me to consider switching again as loans were now available at 2.8%. However when I enquired I was told that the £10000 ERC attached to my plan meant that there would be no benefit in moving to the lower rate until 8 years had elapsed.

In essence in 2014 my broker moved me from a plan with no lock-in to one that has. Consequently I am now locked out from rates that are available to new borrowers. Neither the broker, nor Aviva, have shown any sympathy.

However these are rates and T+C you agreed to, sympathy has nothing to do with business transactions, it is a contractual obligation you agreed to. You are not lending money from your friend are you?

lostkey

Csgohan4, you miss my point.

I do not dispute I signed an agreement with Aviva and, although I think they could be more sympathetic, I am indeed bound by agreeing to their T&Cs.

But my grievance is with my broker and the advice he gave me in 2014. At that time  he arranged for me to move from a plan with no lock-in to a new one with a permanent £10800 early repayment charge (ERC).  Just recently he rubbed salt into the wounds by inviting me to consider switching again, this time to a deal at an interest rate 50% less than my current plan. When I expressed interest he told me that  the ERC penalty attaching to my current plan meant it would take 8 YEARS before a switch would show a saving!

Given (a) that the broker is a member of the Equity Release Council and

(b) I had been compelled (not volunteered) to pay over him over £1000

I think I was entitled to think I was getting  top quality professional advice. But clearly I was not.

No-one can explain how these swingeing penalties are justified , or why we are compelled to use brokers who recommend such plans.

csgohan4

I assume they were the best rates at the time and you were aware of the lock in period at the time too? if no to the latter, you could raise a complaint