Equity Release Companies to Avoid

The Secret Why You MUST Avoid These Equity Release Companies in 2021

Equity Release Can Be a Dream Come True, But if You Get Caught by an Illegitimate Lender, It Can Be a Nightmare. Discover the Firms to Avoid in 2021.

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Equity Release Companies to Avoid

Avoid becoming a fraud statistic by using a trusted equity release plan provider!

Over 16,500 UK retirees released equity from their homes in 2021. If you’re looking to join them, you must ensure that you know which equity release firms are on top and those to avoid.

We’ll guide you in discovering:

  • The signs that indicate an equity release plan provider is regulated.
  • The red flags to look out for, to avoid illegitimate lenders.
  • Why it’s so important to release equity through a regulated plan provider.

While the equity release industry is the safest it’s ever been, you’ll always be at risk when it comes to any financial products. Luckily, we’ve done an in-depth analysis of the industry, looked at over 220 plans, and discovered all the details you need to know about releasing equity from a legitimate lender in 2021.

What’s Equity Release?

Equity release is the use of financial arrangements that provide the owner of a house or other property with funds derived from the value of the property while enabling them to continue using it.

Learn More: What Is Equity Release?

How Does Equity Release Work?

Simply put, an equity release is a UK product that allows you to unlock the cash tied into your home, with no payments required in your lifetime. Instead, the loan, plus interest, is repaid from the sale of your home when you pass away or move into permanent care.

Learn More: How Does Equity Release Work?

Equity Release Types

There are two equity release options available to you.

  • Lifetime mortgageis a mortgage secured on your property (provided it’s your main residence), while retaining ownership.
  • Home reversionis where you sell part or all of your home to a home reversion provider in return for a lump sum or regular payments. You have the right to continue living in the property until you die, but you have to agree to maintain and insure it.

Find out now!

Best and Worst Equity Release Companies

4 Secrets to Identifying Which Equity Release Companies to Avoid

Before 1991, the equity release market was riddled with scandal as dubious lenders took advantage of UK’s elderly homeowners, some being left with crippling debt.

What’s changed?

The Equity Release Council was formed to regulate the market and protect consumers releasing equity from their homes.

There are 4 secrets to identifying a legitimate equity release lender, and here they are!

1.      They Must Be Registered With FCA and Be a Member of the Equity Release Council

Avoid ‘lenders’ who are not registered with the Financial Conduct Authority1 and are not  Equity Release Council2 members.

The Financial Conduct Authority regulates the financial industry as a whole, while the Equity Release Council specifically oversees the equity release market.

Some of the rules set out by the ERC include:

  • All plans need to have fixed or capped interest rates, limiting the amount of interest that can accumulate.
  • Plan holders have the right to stay in their homes until they pass away or move into permanent care.
  • Homeowners can relocate and transfer their plan to another home, as long as it meets the lender’s criteria.
  • A ‘no negative equity guarantee’ ensuring that your family never owes more than the sale value of your home, when you die or are transferred to long-term care.
  • Plans must have reasonable interest rates that are in line with industry standards.
  • At the onset, you must be made aware of an early settlement fee structure.

Any regulated lender will be upfront about their Equity Release Council membership, which might even be visible on their website.

2.       They’ll Be Upfront About Their Fee Structure

The equity release process will generally cost between £1,500 and £3,000, and your equity release provider will be upfront about these expenses.

These fees include:

  • Advice fees
  • Valuation fees
  • Solicitor fees
  • Application fees

It’s highly advised to shop around at various plan providers to see who has the best deal to suit your needs.

3.      Early Repayment Charges Should Be Within a Normal Range

While equity release is intended to last until you pass away or move into long-term care, we never know where life can throw us curve balls.

If you would need to cancel your equity release plan due to unforeseen circumstances like immigration, you’ll likely have to fork out an early repayment charge.

This amount could be as much as 25% of the loan, but can differ from one plan to the next.

Some providers offer specials where you won’t need to worry about early repayment charges for the first 3 years of your equity release plan.

4.      If It Sounds Too Good to Be True, It Probably Is

The equity release process generally takes 4-12 weeks, requires a solicitor, and, while pretty stress-free, it’s a detailed process.

Steer clear from any so-called equity release provider willing to give you an instant loan without checking your credentials. That’s almost definitely a scam!

Common Questions

Who Are The Equity Release Council?

Who Is The Best Equity Release Plan Provider?

Whom Should I turn to For Equity Release Advice?

Conclusion

If done right, equity release can be a life-changing financial product for you and your family. By releasing equity from your home, you can have the means to stay put and live out your days stress-free.

Just ensure that you don’t get fooled by an illegitimate provider. The best way to do so is by ensuring they’re members of the Equity Release Council.

Editorial Note: This content has been independently collected by the EveryInvestor advisor team and is offered on a non-advised basis. EveryInvestor may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.

How Much Can You Release?

Use the FREE Calculator Below 👇

 

Equity Release Calculator

Value of Your Home?

50000

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🔒 100% Secure & Fast. Takes Just 8 Seconds.

Equity Release Companies To Avoid

It's VERY FAST, takes just 8 seconds

Now, compare and save: Search over 200 equity release council approved plans and find the best deal for the amount of money that you need.

Equity Release Companies to Avoid

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HOW MUCH EQUITY CAN YOU RELEASE?

Most people are using equity release as a means of retaining the use of their house while also obtaining a lump sum or a steady stream of income. Get matched with an expert and check your eligibility for equity release options.

Use our free equity release calculator & see how much you can release today.

How Much Can You Release?

Use the FREE Calculator Below

 

Equity Release Calculator

Value of Your Home?

50000

Drag me

🔒 100% Secure & Fast. Takes Just 8 Seconds.