Aggregrating the Best Equity Release News…

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.

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!

Although equity release mortgages are only starting to be recognised as one of the few major instruments in retirement planning; as a concept equity release has been around for a long time. Home reversions in particular are certainly not a new product and many banks have been offering these for years. Now the major equity release providers have caught up with the banks and in many cases they now offer a much more comprehensive service.

Equity release as you or I know it, however, has come a long way in the last few years. The Financial Services Authority has regulated equity release for a start. Further, the major providers have come together to form a code of conduct known as Safe Home Income Plans. This can help the applicant get the best service available.

Home reversion plans had some bad press a few years ago and rightly so. I don’t think anyone could argue that the industry wasn’t in a bit of a mess. More regulation is in place and IFAs need to take a home reversion exam before giving advice. Not only this, the equity release industry has tidied itself up on its own accord and is making a great name for itself amongst the public and the circles that matter. The press will continue to talk rot about the home reversion industry until the news stories from this successful cycle start to filter back to them. Lazy journalists are the biggest contributor to the bad press that surrounds equity release and home reversion plans and until they stop recycling old news without a good sense of editorial judgement this will continue.

Many contradicatory claims exist regarding the progress and activity of the equity release industry. Some of those sources suggest that equity release applications are falling as a result of the current economic climate. Others state that the economic turmoil is boosting the equity release mortgages industry as times are hard and people need help with retirement planning and also need a cash injection.

So which source to trust? Neither, is my humble opinion. I trust Google. Google states that the term equity release received 50,000 searches last month. Up 500 on the month before. This means that people online are increasingly interested in equity release and continue to search for pages related to the industry.

As far as anything in the financial services industry goes, lifetime mortages are actually quite simple. However, they haven’t always been simple: we have the Financial Services Authority to thank for that. Now, with regulations at a steady compromise between government and provider, we can be thankful that ‘industry standard’ is a term bandied about in the equity release and home reversion market.

There hasn’t always been an industry standard criteria or anything else for that matter. Terms have varied widely along with the criteria for equity release mortgages qualification. Now terms still do vary and there are different criteria amongst the providers but these differences are usually only on the peripheral and unusual criteria; not the standard ones such as age or loan-to-equity ratio.

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As much as lifetime mortgages have been around for generations in some form or another, it is still a growing industry. Talk of equity release flailing is not backed up by the figures, with applications for equity release mortgages up around 5-10% every quarter. It is a very useful tool for retirement planning and so will continue to rise both here and in the USA.

Home reversion as a form of SHIP equity release is also an industry growing far faster than any other in the financial industry…aside from corporate insolvency of course. The reason for its popularity is that home reversion does not affect the right to stay in the home. This right is guaranteed for life making it a win-win situation allowing you to stay in the home you love and have worked for as well as opening up more money so as to enjoy retirement.

Because of these clear advantages, home reversion plans will continue to grow in popularity as more people realise these important factors.

This is an inherently complicated question that I will attempt to simplify. Complicated for two reasons. One, equity release is an umbrella term for a range of equity release mortgages. Two, everyone’s personal situation is different so answering this in the general is an impossible task.

To break it down into good advice:

First, try and understand your needs. Equity release is a great means of retirement planning. It helps to supplement your income at a time when money is both needed and well received. 

If you could use some extra cash to help make your retirement more enjoyable for both you and your family, then the chances are equity release or home reversion is definitely for you.

If equity release is right for you, then the rest is simple. Talk to a provider (like us) and they will go through the range of equity release mortgages and help you understand which one is right for you.

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.

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.