In some areas of financial planning, advice is desirable or useful, in others it is essential.
With Equity Release it is mandated – as you cannot receive an Equity Release loan without confirmation that suitable advice has been taken.
The reason why advice is crucial is the this is an area where there are potential pitfalls, and the risks need to be carefully managed.
The major risk is that you lose your home. However, in today’s market this is largely protected by a guarantee that lenders provide that this will not occur.
But the equity value in your home could be wiped out, and this might have consequences for your plans or needs later down the line, or for the next generation if you wish to leave a legacy.
A more nuanced risk, is that if you arrange a lifetime mortgage for a particular purpose (e.g. to top up income) and because of circumstances, personal or economic, things change and the objective is not met in the medium term. Another, somewhat related, risk is that you have used this option but there was a better option available to you that you missed.
If you choose to buy a new car and then three months later something changes and you need to take it back and get another one, this is relatively easy to organise, but if you take a lifetime mortgage and then a while later decide it was a bad idea, the reversal of this decision can be very difficult, potentially horrendously expensive, and even – maybe – not possible.
Advice is crucial, not just to get the “best deal” from the best provider, but to check the suitability of the loan against your circumstances, against alternatives, and to ensure all the risks are weighed up and fully understood. Then you may need to navigate the complexity of the application process and the legalities, plus manage the money released once you have them available to you.
Finding a suitable adviser is – arguably – the most important step you take in this process.
Equity Release
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
GET IN TOUCH
Main Tel: 01603 380331
Kings Lynn Tel: 01553 604844
Find out what we can do to help you with your finances. Get in touch with us today!