According to the Equity Release Council, one in three homeowners is prepared to release equity from their homes. There are many reasons for this; home owners may want to help their children to get a foot on that elusive property ladder, or they may wish to pay for home repairs or in-home care; they may be facing shortfalls in their interest only or endowment mortgages, or need the money to fund their retirements.
Recently, this area has once again become huge business, and the sector is likely to exceed £1 billion in 2013 as 14% more people took out such products in the first six months of 2013.
Historically, and especially in the 1980s and 1990s, equity release products have had a bad press resulting in many people ‘giving away’ their homes for a relatively small sum, or ending up in negative equity. It led to a huge wave in negligence actions against independent financial advisers and lawyers alike.
The sector has cleaned up its act considerably. The Equity Release Council has a major supervisory role and the equity release financial products have to be authorised by the FCA (the Financial Conduct Authority). However, when considering the option of equity release you must seek independent advice – in fact, independent legal advice is a mandatory requirement of both an independent finance professional and an independent solicitor.
How can we help you to decide what is best for you?
We can go through the advantages and disadvantages of each of the three types of main equity release products (a lifetime mortgage, a home income plan, a home revision plan) from a legal perspective and explain about all the legal ramifications of each.
You will have to consider many things, including: how these products may affect any potential means tested benefits; that you will be paying relatively high interest rates (much higher than the standard mortgage rates) actually compound interest rates; your tax situation; any inheritance tax that will be liable on the estate; the interests of other parties in the property and your beneficiaries (because this will undoubtedly affect the size of the estate that you will leave).
We can offer totally independent, individually tailored advice, based on thirty years of experience, focusing upon you and your individual situation.
Contact Janak Bakrania directly, complete our online enquiry form, or call us on 0207 387 2032.
