Equity release is not without it’s problems and in the recent past the regulator, the Financial Services Authority, has stepped in to control the market and offer impartial information to potential clients.
The key issues are the cost of the loan, the ultimate ownership of the family home and the use to which the proceeds are put to. Things can go wrong at each stage, with potentially, the loan costing more than the value of the house over time, relatives believing that the house will pass to them unencumbered, and the proceeds being spent by the “black sheep” of the family on a “rock and roll” lifestyle.
Recent developments like the SHIP standards, specifically a no negative equity guarantee and the ability to guarantee a fixed remaining equity percentage upon sale, make the idea of equity release much less risky than previously experienced.
Independent advice will help greatly with selecting the right product for your circumstances.