There has been so much negative press about equity release plans (lifetime mortgage) so our advisers would like to reassure you:
Equity Release is Regulated
Equity Release is regulated by the Financial Conduct Authority (FCA), providing protection, guarantees and security and Dorset Financial Planning FCA number is 779271. As an extra safeguard, Dorset Financial Planning is a member of the Equity Release Council (ERC). All members of the Equity Release Council have agreed to abide by the Council’s strict code of conduct and have signed up to the Statement of Principles.
Equity Release Council Guarantees
A lot of lifetime mortgage providers (or lenders) are also members of the Equity Release Council provide the following guarantees:
- Will I lose my home?
As your main residence, you have the right to remain in your home for as long as you choose and therefore will not lose your home.
- Can I move?
You have the freedom to move to another property without financial penalty - subject to provider criteria. Your adviser will carefully explain this.
- What about negative equity?
You will never owe more that the value of your home due to a ‘no negative equity’ guarantee.
- What about inheritance?
When you pass away or move into long term care, your home is sold and the money is used to pay off the balance of the equity release mortgage. Monies left over will be paid to your beneficiaries. An adviser can discuss with you a ‘protected equity guaranteed, which protects a fixed percentage of your home’s value to your beneficiaries.
- What about paying off the equity release mortgage?
Your adviser will need to discuss if you have plans to do this. Some plans have fixed early redemption penalties over a set number of years whereas other plans have longer penalties. You can make monthly repayments like a conventional mortgage and some equity release plans allow partial repayments – usually up to 10% of the capital each year.
Lifetime (equity release) developments
Advisers ensure the advice given for mortgage and lifetime (equity release) mortgages is both fair and suitable for clients’ needs, taking into account market developments, product launches and the requirements of our regulator, the Financial Conduct Authority.
It is a big decision to take out equity release and therefore expert, professional advice is important using only qualified equity release advisers who will take the time to understand your needs and explain the products available to you thoroughly.