Understanding Equity Release

Use your value wisely.

Many people of pension age find themselves ‘asset-rich’ (their home) but ‘cash-poor’ (low savings), Equity release  allows such individuals to remain in their homes while turning some of that 'locked up' value, or equity, into cash; either by drawing a single lump sum or more regular smaller sums. 

If you are thinking of taking out an equity release plan then you need to find out as much as you can about your options and weigh up the advantages and disadvantages fully before you decide if equity release is right for you.

Gaining advice

It is recommended that you take the advice of an Independent Financial Adviser (IFA) before entering into any equity release mortgage or home reversion scheme. However, it is not mandatory and you can, if you wish, go directly to a company offering a scheme; alternatively, you can go to an adviser representing just one plan provider. The choice is yours. Whenever you are in doubt concerning any part of the scheme you should ask before you sign. Ensure that you receive in writing satisfactory replies to questions you want answering. You should check that the scheme you choose allows you to move home in the future should you consider this to be an important factor.

FCA and the Equity Release Council

The Financial Conduct Authority now regulates all mortgage based equity release schemes. At the moment Home Reversion schemes are not regulated. However in addition to FCA regulation the most respected equity release providers sign up to the Equity Release Council's Statement of Principles. It is very important that you seek expert financial and legal advice before entering into any equity release scheme.

Legal Advice

Trust in your advisers is crucial to all aspects of law but it is equally important when dealing with the delicate issues relating to property and finance. Our Equity Release specialists draw on vast experience in tax, Wills, financial planning and property work. Our legal experts are here to make sure that your equity release goes as smoothly and swiftly as possible. Because we are specialist solicitors we will guide you through your equity release and make sure that you know exactly what is happening at every step. Our advice is entirely independent of any financial institutions and all our advice is geared entirely to ensuring that the decision you reach is in your own personal interests and suits your own personal situation.

Your relatives

You may wish to take into account the effect upon your estate of entering into such a scheme: this will result in reducing the amount of your estate left to your heirs/beneficiaries. It is recommended that you tell your beneficiaries (the people that you intend to leave money to in your will) about your equity release. Regardless of the type of equity release scheme, your estate will be reduced by taking out an equity release and it is a good idea to tell your family about this. Of course you do not have to. It is entirely up to you.

Be Prepared

Fosters Law have a wealth of experience in this specialist market; working with clients and, where necessary, their families across the various schemes and with all the main lenders. We find that, following our advice and representation, clients are better informed and protected; relieving the stress during the actual transaction and placing them in a preferred position in the future.