Arrangement Fees from Advisors for Equity Release - Do I need one?

Leodogger

MWT said:

Leodogger said:

That sounds a hell of a lot of money for recommending ER plans!   Can it be cheaper once you have got the advice going elsewhere for your equity release plan who offer free valuations etc.,

You are going to have to get the advice from the same party as you get the plan through so their is a continuity between the advice and taking the product, but you can get it without paying a fee for the advice in a lot of cases...

Given your comments about the will issue I'd suggest starting with advice from 'StepChange Financial Solutions' as they do not charge for advice and can access a wide range of lenders, which can include products with features like free valuations, no product fee etc. but I would seriously suggest you look at the other features of the product like the way ERC is handled, down-sizing protection etc. and avoiding a few hundred in fees up front is rather less important than getting the right product for the future.

I do understand the desire to avoid the advice fee as it can easily get into several thousand, so unless you have a particularly complex case that StepChange cannot help you with, their free advice may be the way to go...

We do more or less know now what we want and don't want in a plan but it is the arrangement fee that is the biggest fee.   At the moment we are balancing up who to apply through as you can't go direct to a lender, you have to go through an advisor and their fees differ greatly.    So far we have had Age Partnership at £1795 (which they don't receive until the money goes into your bank account) and Equity Release Supermarket at £995 !!    What I need to find out now is if the cheaper ones do all the work like Age Partnership do (they even arrange for the solicitors to call face to face at your home to go through the contract etc).

ACG

Leodogger said:

Update -  Now had a meeting with Age Partnership and our worst fears have been realised.    We had a Property Protection Trust on our Wills and have been told that until we get that Trust removed, we cannot get an offer of Equity Release on the property.  Which means making a new will (although the Tenants in Common registered at the Land Registry can remain).    So altogether with making a new will, it is going to cost us an eye watering £3124 (£1795 for Age Partnership for the Arrangement Fee!).  An additional £1000 for the solictor and £329 for the new will!!).   Of course it also means we have to sacrifice our protection from care home fees by giving up the Trust Will !

You can not really count the arrangement fee. That fee is in essence buying you a cheaper rate. 
Take a product without the arrangement fee if it makes you feel better but it appears it will cost you more. 

As for the rest... Well, yes. I love my job, but I also want/need paying for it. I am sure the other brokers and solicitors out there are the same. 

Equity release will eat into your equity anyway, so you may find you get what you want all be it in a different way. 

On a side note, you might want to keep hold of that equity to pay for care. We viewed some care homes for my gran, all I can say is thank god she has some savings and her home. The care homes paid for by the council are not exactly the best. I have no idea if I am in my grandparents Will, but even if I am, all I can say is that I would happily see every penny go to the care home if it means she is being looked after because I honestly would not put a dog in some of the care homes we went to see. 

Leodogger

Which is why I told my daugher if I am on my own and get to that stage, put a bag over my head first LOL !!  Joking aside she did say that she would never allow me to go into a care home.   She lives in Spain and works as a part time hairdresser so has the luxury of being at home much of the day whilst her husband works!   As for the fees, it is the big difference in Advisor fees that is what gets my goat!    £1795 for coming out and doing a 2 hr interview and putting out feelers for some ER plans has got to be over the top I feel unless I am getting much more than this that I just don't see.

ACG

You probably need to have a think about that. 

My gran has dementia. We tried to look after her, it just didnt work. It was a full time job and not a nice job. 
She is in a care home now where she gets 3 meals (she can have a full english every morning if she wants!). She gets looked after by people who do it daily have had more training than we have had and they do it with a smile on their face (this is probably when the extra cost comes in). When we see my gran, she has no idea who we are, but we see the best of her so to speak. 

Do you want your daughter wiping your backside and having those memories of you? 
I would take the care home personally, better on your daughter but not your bank account. 

Leodogger

ACG said:

You probably need to have a think about that. 

My gran has dementia. We tried to look after her, it just didnt work. It was a full time job and not a nice job. 
She is in a care home now where she gets 3 meals (she can have a full english every morning if she wants!). She gets looked after by people who do it daily have had more training than we have had and they do it with a smile on their face (this is probably when the extra cost comes in). When we see my gran, she has no idea who we are, but we see the best of her so to speak. 

Do you want your daughter wiping your backside and having those memories of you? 
I would take the care home personally, better on your daughter but not your bank account. 

Know what you mean, but I had to wipe my mother's back side when she was terminally ill towards the end of her life, why wouldn't you, she did it for you when you were a baby LOL!    Also went to see my Mother In Law in hospital when she had dementia, she went to the loo whilst we were there but it came away all across the ward, the nurses stood there and watched as we cleaned it up and laughed at us !!   You see I am used to cleaning up after relatives and I have no doubt my daughter would do the same for me after giving her the money to buy a house.   She is the most thoughtful person I have ever met apart from my husband     Of course the difference in many cases is that people are all at work (I was too when my mother was ill but it was only for a short time).  Doing it for years might be a different thing though.

MWT

Leodogger said:

We do more or less know now what we want and don't want in a plan but it is the arrangement fee that is the biggest fee.   At the moment we are balancing up who to apply through as you can't go direct to a lender, you have to go through an advisor and their fees differ greatly.    So far we have had Age Partnership at £1795 (which they don't receive until the money goes into your bank account) and Equity Release Supermarket at £995 !!    What I need to find out now is if the cheaper ones do all the work like Age Partnership do (they even arrange for the solicitors to call face to face at your home to go through the contract etc).

I understand how you feel, we were in the same situation a couple of years ago.

We already knew which product features we wanted, we had researched the products available and were pretty sure we knew which lender had the best match for what we wanted, but we still needed 'advice' even though we felt no need for advice...

We looked around and were faced with fees from £995 - £5,000 and a lot of foot-shuffling when it came to explaining what, if anything extra we would be getting by using someone at the higher end of the range...

When you add in the fact that the advisor is also going to get paid by the lender, it really didn't make much sense for us...

Then we found StepChange Financial Solutions, they are related to the StepChange debt management charity, but a different organisation covering mortgages including the various products aimed at the retirement end of the age range, and they do not charge a fee, they just get paid by the lender like all the other advisors who charge a fee on top.

They still organise all the necessary steps for you, including solicitors making a home visit if that is what you want.

We went through the whole process with them remotely, with the solicitors being the only part that was face-to-face. They ended up (unprompted) recommanding the product we had already determined was the best fit for us so we felt somewhat vindicated in our approach.

I can't say that there is no value in paying higher fees for advice elsewhere, perhaps someone less clear on the product features and options might benefit from more advice, but frankly I never felt that StepChange were cutting any corners and took great pains to make sure everything was clearly explained and our needs fully understood and documented.

There are also some High St. lenders who will provide free advice, but the product range they offer will be more limited, but they are also an option if you are looking to eliminate the advice fee.

Leodogger

Will take your advice on board!   Do they search whole of market and can they arrange home visits for solicitors etc?

MWT

Leodogger said:

Will take your advice on board!   Do they search whole of market and can they arrange home visits for solicitors etc?

As I already mentioned, they arranged solicitors who came to our home to complete the necessary paperwork and to make sure we understood what we were signing -up for...

The best thing to do is just give them a call and ask your remaining questions directly, there is no obligation or cost so if there is anything you don't like then just go elsewhere...

Leodogger

MWT said:

Leodogger said:

Will take your advice on board!   Do they search whole of market and can they arrange home visits for solicitors etc?

As I already mentioned, they arranged solicitors who came to our home to complete the necessary paperwork and to make sure we understood what we were signing -up for...

The best thing to do is just give them a call and ask your remaining questions directly, there is no obligation or cost so if there is anything you don't like then just go elsewhere...

Great advice, will do !

Leodogger

MWT said:

Leodogger said:

Will take your advice on board!   Do they search whole of market and can they arrange home visits for solicitors etc?

As I already mentioned, they arranged solicitors who came to our home to complete the necessary paperwork and to make sure we understood what we were signing -up for...

The best thing to do is just give them a call and ask your remaining questions directly, there is no obligation or cost so if there is anything you don't like then just go elsewhere...

Update - I phone StepChange Solutions but they can't give me a date with an advisor before 12 days time and she said it could take up to 4 months which is going to make it difficult for us as our daugher has now seen a property which she has put an offer in on, so she must commit to it in the next week or so.