Aggregrating the Best Equity Release News…

If you turn on the news for more than a minute you will no doubt hear talk about the economy shrinking, quarter by quarter. The collective output of the UK is getting smaller by the month and doom and gloom is predicted. One industry that does seem to be recession proof, however, is the equity release industry. As regular mortgages dry up to all but those with enormous deposits; equity release is growing at a very steady rate. More and more people are turning to their home as a viable means of retirement planning. One logical reason for this would be the instability of the financial markets and the low interest rates. This combination leaves little room to make your savings go to work. One way people are guaranteeing a steady source of income is to tap into their biggest asset, their home. In this market, it looks the ever more sensible option.

If you have been reading a lot about equity release, you will have come across the organisation called SHIP - Safe Home Income Plans. If so, you might be wondering what exactly it is that they do. Well I’ll try and explain a little bit more about SHIP for you. SHIP is a company that is supported by the most respected and responsible equity release companies. It has the aim of providing the consumer with the most reliable equity release scheme possible and does this by providing a code of conduct for its members to follow.

The code of conduct for equity release can be broken into two parts:

First, it is the duty of all members to provide clear and accurate advice on equity release.

Secondly, SHIP address the equity release and home reversion plans itself. All plans provided by SHIP members must carry a no negative equity guarantee; meaning you will never owe more than the value of your home - no matter what the market does.

Now the biggest news in the financial services authority at the moment is the monumentous decrease of the Bank of England base interest rate. It now stands at 1.5% and this is incredible as it is the lowest it has ever been. This is great news for those who are net debtors and those who have tracker mortgages as they have to pay back less each month. But what about those whose net personal balance sheet shows a positive sum? Well, this has serious repercussions as it all but eradicates the banks as a viable savings option; forcing risk-averse savers to incur more risk than they would like should they want to put their money to work.

As regards equity release, the Press Association expect the equity release providers to rethink their interest rates accordingly. Combine this factor with the pension fund instability and it is easy to see why equity release remains a growth sector in retirement planning.

Now a lot of talk at the minute in the equity release world, and I’m guilty of it too, is discussing serious and very major issues and reasons why people take out equity release. Now these are all valid reasons but for some people there just aren’t such clear cut reasons for equity release. Which doesn’t mean to say this alone should not constitute a reason. Although I am always of the opinion that there should be a good reason before you take out an equity release mortgage, it could well be the case that you are sick and tired of living uncomfortably without enough extra money to make your life that little bit better. Although on the face of it, this is not such an obvious reason for equity release, it is still a very good reason. As long as there is truth and thought about your decision, then it is a valid consideration.

I was reading Passage to India by E.M. Forster the other day, which is a classic book by anyone’s standards. A quote jumped up at me as it has a particular application in the world of equity release. The quote went as follows

“Give, do not leave. For when you are dead who will thank you.”

I believe this is the direction equity release is heading and the reason why it will grow to be so big as an industry.  With the global recession, many people are releasing equity in order to help out their families in times of financial hardship. Rather than leave a full inheritance, older homeowners are deciding that the money would be best put to use now rather than in 20 years when the future is uncertain. At least now the need is great and sure.

Now equity release is set to double in size if you read reports from some of the biggest equity release providers out there. Now what does that mean to you if you are thinking about equity release. When something gets popular it is always important to remember to think if you want it because it is suitable for you or whether you have been attracted to it because of its popularity. Equity release is not for everyone, just as any other financial product has its own range of suitable people. As I always state, in order for equity release to be suitable for you, you need to have a good and valid reason for wanting to release the equity.

Although not typically as associated with Christmas as, say, a mince pie; equity release is becoming a hot topic at Christmas time for one main reason. First of all, the reason equity release is being discussed is that it is a family issue and so needs to be talked about with the family. However, families can be big and spawled over the country which means family time is rare. Hence Christmas chats. An opportunity to discuss equity release in person when the whole family is together for Christmas is hard to pass by.

Should you happen to decide that equity release is for you, then one important thing to do as the next port of call is find an equity release adviser that is suitable for you. This is made easy by websites that have a network of IFAs who work on a postcode basis. This ensures that your equity release adviser is local to you and knows and understands your house, area and needs. If there isn’t an equity release mortgages adviser in your local area, these sites do their best to put you in touch with the best of the nationwide equity release companies to ensure that you always get the best possible service.  What’s more, this is all a free service.

With the amount of investment currently going into the equity release industry, one can be in no doubt that the industry is here to stay. Fortunately for everybody involved, the investment is going into the right places. Money is pouring into the self regulation bodies and companies are doing a good job at clearing the bad name that equity release has had in the past. Only by clearing up the remains can the new equity release rise out of the ashes and move forward. If Norwich Union are to be believed, 84% of those who took out equity release schemes were extremely pleased with their scheme with the remaining percentages believed to be very pleased. Good news for equity release!

Equity release is quite a simple concept once you get your head around it. I will try to explain it here. The actual equity release mortgages are explained on the website but this bulletin will explain to you how the process of getting equity release works. First and foremost, most people like to get advice and this advice usually comes from an independent financial adviser. These IFAs can either be independent or with a firm of IFAs and some of the firms only specialise in equity release and home reversion.

Then, these IFAs will work through your options and give you what they believe to be best advice. If they decide equity release is for you then they will set up a plan with the best provider for your specific needs.