AT A GLANCE: LIFETIME MORTGAGE (EQUITY RELEASE) LENDER PRODUCT STANDARDS
- For lifetime mortgages (otherwise known as equity release), interest rates must be fixed or, if they are variable, there must an upper limit, which is fixed for the life of the loan.
- The right to remain in your terms and conditions of your contract.
- The right to move to another property subject to the new property being acceptable to your product provider as continuing security for your equity release loan (otherwise known as lifetime mortgage).
- The product must have a 'no negative equity guarantee'. This means that when your property is sold, and after agents and solicitor fees have been paid, the outstanding loan will not be more than the estate value.
Our Equity Release advisers are only allowed to tell you that a product meets the Equity Release Council standard if it meets all of them. If you are offered or are considering a product that does not meet all the standards, the product literature must explain which standards are not met, and give an illustration of the types of risk that this might pose for you.
An increasing number of later life/equity release lending products are available to older homeowners, including retirement mortgages and retirement interest only (RIO) mortgages as well as equity release, with different features, standards and protections. Dorset Financial Planning recommend you seek information on all options to ensure any product you choose best suits your needs, both now and in the future.
INDEPENDENT LEGAL ADVICE
You may choose your own solicitor to carry out the legal work in connection with your lifetime equity release mortgage. Before the equity release plan is completed, your solicitor will be provided with full detils of the plan, including the rights and obligations of your and your product provider under the contract, should you choose to go ahead. Your solicitor will discuss the terms and conditions of your contract and will only sign an Equity Release Council recognised certificate when they are satisfied that you fully understand your rights, obligations and benefits and that you wish to proceed with the plan.
INFORMATION ABOUT AND EXPLANATION OF YOUR EQUITY RELEASE PLAN
At Dorset Financial Planning Equity Release, our advisers will provide a clear and complete presentation and explanation of your equity release mortgage. The benefits and limitations of the plan will be clearly set out, together with yor obligations under the terms of the contract. Your will be given information about:
- all the costs you will have to bear in setting up your equity release plan.
- signpost you in the right direction if you need more information regarding the tax implications of your equity release mortgage.
- what will happen if you wish to move to another property and if you can take your lifetime equity release mortgage.
- how changes in house values may affect your equity release mortgage.