Archive for November, 2008
Equity release, home reversion and their USA counterparts
Now hopefully if you are reading this page you will definitely have learned what equity release and home reversion means and how it all works. I am currently writing this from New York and so the theme for this excerpt is America.
As with our legal system, our language, our philosophy and most other civilised pillars of every day life, the Americans have taken to equity release and home reversion. The similarities between our cultures are patent for all to see and so it is inevitable when a good product is conceived, be it on either side of the pond, the other might take to it.
This time, counter to the trend of recent years, it is the UK that are the trend setters. Only in the USA, equity release is called a reverse mortgage. So if you come across the term reverse mortgage, know for sure that it means exactly the same as equity release mortgages and home reversion.
Equity release terms do vary so a discussion can never hurt
One thing to remember about equity release is that it is an umbrella term for a number of different financial products. This means that the criteria for applicant’s can vary between the equity release products. So, if you are doubtful that you are suitable for one of the equity release products then it is worthwhile to call us for a discussion anyway to gauge your suitability for equity release in general.
One thing to remember, however, is that equity release is only for those aged 55 or over. This is non-negotiable amongst all respectable providers. If a provider is stating that equity release is available for under 55s then it is likely you are being sold another product with the large potential of being mis-sold an unsuitable scheme.
The FSA did well with regards to equity release
Despite everything that has been happening in the world economy, down in Canary Wharf London and Wall Street New York, the Financial Services Authority have been doing some good things, not that many people would notice or believe me. Take for instance the regulation of equity release, this is a good thing because it has simplified equity release to the point whereby it is now a walk in the park. All or most of the providers have hard and fast rules which they stick to when creating their criteria for equity release.
Essentially, this means that you will know straight away whether equity release is suitable for you and that this suitability runs the same throughout all of the providers. It also means spotting rogue providers is more simple. Generally, if most of the providers do not think equity release is in your best interests then anyone who says it is can be deemed a rogue provider. Avoiding the misselling of equity release is one of the remaining few challenges and with regulation, the FSA have gone some way to clear up this obstacle.
Well done to them.
CLICK HERE TO GO BACK TO THE MAIN PAGE