Navigating the UK equity release market can be daunting, as there are a variety of different products and providers to choose from. However, with a bit of research and understanding of what to consider, you can make an informed decision that will suit your needs.
One of the first things to consider when looking at equity release products is the type of plan. There are two main types: lifetime mortgages and home reversion plans.
Lifetime mortgages allow you to borrow a lump sum or set up a flexible credit line, with the loan secured against your property. You don’t have to make any monthly payments, and the interest is added to the outstanding balance. This means that the amount you owe will grow over time. Although if you prefer, you can make payments to avoid this.
Home reversion plans, on the other hand, involve selling a percentage of your property to the equity release provider in exchange for a lump sum or regular income. In this case, you give up ownership of a portion of your property and will have to vacate the property once you sell the entire property. We do not advise on these plans and they only represent around 1% of plans arranged in the UK.
It’s also important to consider the fees associated with different equity release products. These can include arrangement fees, valuation fees, and legal fees etc.
Another important factor to consider is the interest rate. Interest rates can vary significantly between different equity release products, so it’s essential to understand the different options available to you. This is where we come in. We work for you, and only you and will advise and guide you every step of the way.
In summary, navigating the UK equity release market can be a daunting task, but with a bit of research and understanding of what to consider, you can make an informed decision that will suit your needs. Consider the type of plan, fees, interest rate, and use a whole of market advisor who will make sure you fully understand the pros and cons of equity release before making a decision.