Equity release

dunstonh

What do they need to look out for- I know a few years ago I heard about some unscrupulous types getting involved with this. They are both in their late 70's.

Equity release is regulated today.  It never used to be.   So, I wouldn't worry about it too much.

Normally IFA firms or whole of market mortgage advisers tend to get in contact with the children or get the solicitor to ensure the children are contacted so they know it is going on.    This is in part because, most complaints come from children who didn't know about the equity release and are angry their inheritance is lower than they thought it would be.

A solicitor will also provide and document the warnings above and beyond what the adviser does.

MWT

dunstonh said:

Normally IFA firms or whole of market mortgage advisers tend to get in contact with the children or get the solicitor to ensure the children are contacted so they know it is going on.

I'm sure you didn't intent to imply otherwise, but that would of course only be done with the consent of the borrowers...

It is a good idea, but I do understand why not all borrowers will want to do it. 

TimSynths

MWT said:

dunstonh said:

Normally IFA firms or whole of market mortgage advisers tend to get in contact with the children or get the solicitor to ensure the children are contacted so they know it is going on.

I'm sure you didn't intent to imply otherwise, but that would of course only be done with the consent of the borrowers...

It is a good idea, but I do understand why not all borrowers will want to do it. 

This is exactly what has happened, I am named in the paperwork as offspring and am setting up a lasting paper of attorney. 

ACG

Keep_pedalling said:

dimbo61 said:

Please read up on equity release and also Key Financial !
I do love the adverts where the lovely man turns up at the home of " customers " looking to take out a equity release secured loan on their home.
Nice smiling guy making £2/3/4,000 commission 
Check the terms and conditions and get advice from a solicitor.
Early repayment charges, rolled up interest etc 

There is no commission, there should be a number of fixed fees including an advice fee but that will be no where near £2-4k

There is commission on equity release. 
I refer cases off to another broker as I do not do myself and I get a cut of the commission. 

ACG

TimSynths said:

My parents have just let me know they intend to do equity release with Key Financial for £40k on a property worth £350k with an option to take a further £40k later if needed.

What do they need to look out for- I know a few years ago I heard about some unscrupulous types getting involved with this. They are both in their late 70's.

Any advice/info appreciated. 

Tim.

Equity release used to be dodgy, but it is now regulated and is funded by pension companies in the main such as L&G, Aviva etc. Nothing remotely like what it was. 

I suppose the key thing is that if they are not paying the interest, the interest will roll up and it rolls up faster and faster over time. It is in essence interest on the loan which then becomes interest on interest on interest etc. Thats not necessarily an issue if you parents know and understand it. 

I cant speak about Key specifically although they are one of the biggest brokers in that part of the market. 

MWT

ACG said:

There is commission on equity release. 

Exactly, that is how StepChange Financial Solutions funds their 'no fee' equity release advice.