Do I need to speak to EVER Equity Release provider?

YorkieMan

Seriously considering Equity Release but not every ER company offers plans from every provider.  Do I really need to be interviewed by, say, Age Partnership, KEY AND Equity Release Supermarket to cover all options?  If not how do I get full quotes from all possible providers?

MWT

You will never get, nor do you ever need a full quote from all possible providers.

You do need to get advice, that is a regulatory requirement, the advisor will then use the information you have given and will get a full quote from a provider that matches your needs.

You can choose a free source of advice (StepChange for example) or you can go with one of the others on your list that will charge from a few hundred to a few thousand for the advice, but paying for advice does not in itself guarantee a wider choice of products as some advisors are limited to a narrow selection.

Equity Release Supermarket is a good place to get an idea of the products and features out there but make sure you are happy with their fees before you proceed.

YorkieMan

But if you go with Equity Release Supermarket alone you will never know if the product from, say, Key, has a lower interest rate, lower fees, or be an all-round better product for your needs.

I understand that you need to get advice and that that is a regulatory requirement, but do I really need to get advice from every provider that does not pay commission to one particular advisor.

Supplementary question: I can take out a loan, mortgage, HP, PCP or lease without speaking to anyone. With all the information widely available online, isn't it about time we were allowed to take out Equity Release without having to endure the spiel of a sales man or woman?

MWT

It is a competitive market, and so although there are differences in rates and features there will not be a huge gap between them, and even the features you decide you want are likely to be available with any of the lenders.

The approach I took when comparing products was to look at the published interest rates and did enough of my own research to understand how things like the percentage of equity you take out affects the interest rate, and how the age of the youngest life affects what you can take out as well, then went to StepChange for their free advice and compared their proposed product with what I already knew about the range of products out there.

After doing that I didn't feel the need to look any further and went with their suggestion.

You'll find that some like Money Supermarket only charge a fee if you proceed with a product with them so that does mean you can talk to more than one advisor if you feel like you need to, but take care as not all advisors will work that way. 

The regulatory requirement for advice on these products is necessary I think as they have features which require a detailed understanding of your aims and objectives which not everyone will appreciate on their own.

I can only say that from my experience with StepChange there was no aspect of 'spiel' or sales pitch, quite the reverse, my advisor was very keep to ensure I understood the impact of taking this kind of loan and the different features that may or may not be important to me given my objectives.

If I could give one additional piece of advice it would be to tell those family members around you about what you are doing as so often on here we have the children of those who have used these products firmly convinced that their parents were tricked into taking these products or who say they would happily have helped their parents with there financial needs and avoided the interest altogether...

This may not apply to you, but it is certainly something to consider if it does...

 

YorkieMan

To keep this conversation going... suppose I got advice from Key in the first instance. Now, Key only offer their own products so in order to consider other options am I required to go through the full 'advice bit' with another supplier?  OR... if I, say, got advice from Equity Release Supermarket alone, I'm missing out on knowing about the product from Key.  I don't like making a decision based on partial information.

MWT

YorkieMan said:

To keep this conversation going... suppose I got advice from Key in the first instance. Now, Key only offer their own products so in order to consider other options am I required to go through the full 'advice bit' with another supplier?

Yes, you will have to complete the advice process with whoever arranges the product you eventually go with.

YorkieMan said:

OR... if I, say, got advice from Equity Release Supermarket alone, I'm missing out on knowing about the product from Key.  I don't like making a decision based on partial information.

You can search through the 'Supermarket' products on your own, you just need to take care to compare like with like on issues like the percentage of value you are drawing down and product features you consider necessary.

YorkieMan

YorkieMan said:

OR... if I, say, got advice from Equity Release Supermarket alone, I'm missing out on knowing about the product from Key.  I don't like making a decision based on partial information.

You can search through the 'Supermarket' products on your own, you just need to take care to compare like with like on issues like the percentage of value you are drawing down and product features you consider necessary.

But it's impossible to get rates without the advice.  It would be far better, if having taken the advice once, one could complete a questionnaire, inputting all the relevant details to obtain quotes from which to choose.  Would you not agree.  It is hardly rocket science.

ACG

Equity release is not my thing, im not qualified or experienced - although I know maybe a little more than the basics. 

Key I believe are "whole of market" so they offer products from multiple companies. 
Realistically, its not a massive market in terms of providers. Most brokers will deal with most if not all providers. There might be the odd provider or product missed off but in a market where most lenders will all be really close to one another its probably a waste of time to be worrying about marginal differences - I realise its a money saving website but in the grand scheme of things it will be negligible. 

As for why you cant do it yourself... The market was abused before it was regulated. It is generally elderly people, people who are vulnerable and the like. Those people are more likely to be taken advantage of.

In addition to that, there are loads of stories on here about SAM mortgages which are not too disimilar to Equity release in principle. People did not know what they were signing up for. 

Look at all of the mistakes over the years SAM mortgages as mentioned, interest only, self cert and so on. Whilst a lot of these are down to advisors to an extent, it was also customers - customers self certifying their income, customers saying they will go on repayment in 2-3 years time and 20 years down the line still on interest only. People say and do things. 

At least with advice and regulation the onus is on brokers to do it right to prevent mass damage to the industry as a whole. Lets face it, financial services does not have the best reputation. Whilst I do not think the FCA are perfect, they are at least trying to get rid of the crooks in our industry. 

dunstonh

Seriously considering Equity Release but not every ER company offers plans from every provider.

You would expect an IFA (with equity release permissions) or whole of market broker to do so (within the expectation that whole of market may not be 100% as some providers may not market their product via the whole of market)

MWT

ACG said:

In addition to that, there are loads of stories on here about SAM mortgages which are not too disimilar to Equity release in principle. People did not know what they were signing up for. 

I wouldn't want people to think that current equity release products are anything even close to the SAM mortgages as there is a huge difference between signing up for a fixed and predictable interest rate roll-up for example and the SAM situation where the final amount due includes house value growth which was very unpredictable.

I'd say that even then people knew what they were signing up for in terms of the calculation, but what they didn't expect was the huge growth in house prices and the effect that would have on their ability to down-size in later life.

ACG

MWT said:

ACG said:

In addition to that, there are loads of stories on here about SAM mortgages which are not too disimilar to Equity release in principle. People did not know what they were signing up for. 

I wouldn't want people to think that current equity release products are anything even close to the SAM mortgages as there is a huge difference between signing up for a fixed and predictable interest rate roll-up for example and the SAM situation where the final amount due includes house value growth which was very unpredictable.

I'd say that even then people knew what they were signing up for in terms of the calculation, but what they didn't expect was the huge growth in house prices and the effect that would have on their ability to down-size in later life.

The loan increases. 
There are differences but there are similarities. 

You can argue people knew what they were signing up for but posts on here say otherwise. SAM mortgages were before my time, I only found out about them on here. But when you read that people were not aware interest only meant interest only, its hardly surprising that ER mortgages are advice only.