Uncertain about Equity Release Schemes? Then you must find an Independent Financial Adviser

If you are considering releasing equity from your home and you are finding that the labyrinth of financial jargon and dense, technical policy descriptions are difficult to navigate, it is important that you look for solid independent financial advice from someone who has passed their CeRER Examinations.

Unless you are experienced in this field, you might be a little anxious about choosing the right professional to help you to make your decision. However, with a little common sense, some research and a few sound fundamental guidelines to help you, you should be able to source precisely the right advisor for your needs.

To begin with, you should search specifically for professionals who have passed their CeRER examinations. This qualification certifies that the holder has specialist knowledge of equity release schemes and will be able to give you the full benefit of his or her expertise in the field.

In order to secure a shortlist of candidates from which to choose, you will need to use some resourceful thinking. Ask your friends and family members for advice and recommendations, run an online search or enquire at your bank.

Networking has changed slightly in that it is easier for you to speak with family, friends, and co-workers about qualified equity release advisers. Online social media sites make it simple for you to locate and read reviews about a potential financial adviser too.

Before you decide on any one candidate there are a few things you should already know about equity release plans available in the UK.

Types of Equity Release Plans
Lifetime Mortgages are one option for you to release equity from your home. They differ from the second option of home reversion. The types and differences are explained here so that you can test the knowledge of your financial adviser.

Roll-up Lifetime Mortgage – this is a fairly standard equity release plan in which you take a lump sum for a portion of your home equity. The value of your home is determined by current market rates. You are given a contract with an interest rate that will accrue during your lifetime or until you move out of the property, at which time you may have to sell the home to pay for the outstanding loan.

Drawdown Mortgage – provides you with a smaller lump sum initially and a withdrawal account. You can continue to draw on the money in the account until it is gone or you no longer need the funds. You only pay interest on the funds you remove and use from the account rather than the entire amount available.

Enhanced Lifetime Mortgage – is provided to individuals with a shorter life expectancy due to a major illness or disease that may shorten their life span. Drinking, smoking, obesity, Aids/HIV, and heart disease issues may qualify. The expectation is that you will have a shorter life and therefore you can obtain more equity from your property in a lump sum.

Interest Only Lifetime Mortgage – this is like the standard lifetime mortgage in that you take a lump sum and have to repay the principle amount. It also accrues interest like the standard equity release plan. The difference is that you pay a monthly repayment of interest on the account. The principle amount is left to be repaid upon selling the home or death, but at least the interest is not growing over time like the other mortgage options.

Home Reversion – this is not a mortgage or loan. With home reversion you sell a part or your entire home. You sell it based on its current value and with the understanding you will not get full value for the portion sold. The provider makes money when they sell your home after your death or removal to a care facility. You do not have interest or monthly rental payments under this scheme. For some it is worrisome because they have sold their home; however, for others it is better knowing there is a guarantee of cash for beneficiaries upon their death.

With five products on the market to choose from, it is imperative you speak with your family regarding your decision.

Signing up for an equity release scheme is a big decision, and it is one that you should not take lightly. In order to help you to choose the best possible scheme for you, it is a good idea to seek good financial advice before embarking on the process. Location can play a major factor in finding a suitable adviser. For instance should you be living in the London Boroughs then it would be prudent to find an equity release adviser based in London.
Tip: Always ask to see their certificate from the CeRER examinations to ensure they have passed the qualifications.

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